Asked by Cassandra Alcantar on May 27, 2024
Verified
Which one of the following statements is true?
A) Using straight-line depreciation for all newly acquired assets when double-declining-balance depreciation was used in the past does not require a cumulative-effect adjustment.
B) An obvious error in recording depreciation expense in a prior year should be corrected by adjusting the current year's net income.
C) A change from straight-line to sum-of-the-years'-digits depreciation should be handled prospectively.
D) Changes in depreciation estimates are prior-period adjustments.
Sum-Of-The-Years'-Digits
An accelerated depreciation method that calculates annual depreciation by adding the asset's expected life years, assigning weights to each year, and depreciating more heavily in the earlier years.
Depreciation Estimates
Projections or calculations of the reduction in the value of an asset over time, used for accounting and taxation purposes.
Prospective
Pertains to future events or conditions as they are expected to happen or be considered for planning and decision-making.
- Ascertain and remedy the impact of revisions in depreciation calculations on financial statements.
Verified Answer
Learning Objectives
- Ascertain and remedy the impact of revisions in depreciation calculations on financial statements.
Related questions
The Pecan Street Ice Cream Company Discovers That Depreciation Expense ...
Refer to Exhibit 23-1 ...
Explain the Impact,if Any,on Depreciation When Estimates That Determine Depreciation ...
The Oberon Company Purchased a Delivery Truck for $95,000 on ...
The Johnson Company Bought a Truck Costing $60,000 Two Years ...