Canetoads Ltd Has Discovered That the Estimated Useful Life Made

question 43

Multiple Choice

Canetoads Ltd has discovered that the estimated useful life made on a material depreciable asset was incorrect due to a change in the way the asset was being used. The correct accounting treatment of this event is to:

• A) disclose the change in the notes to the financial statements.
• B) treat it as an error and adjust retrospectively.
• C) treat it as a change in an accounting estimate and adjust prospectively.
• D) treat it as a change in an accounting estimate and adjust retrospectively.

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Definitions:

Bilateral Contract

A type of agreement where both parties involved promise to perform certain actions or obligations, often creating mutual legal obligations.

Unilateral Contract

A contract in which one party makes a promise in exchange for an act (not a promise) by the other party.

Accepted Into College

The act of being granted admission to a college or university program as a recognized student.

Mailbox Rule

A legal doctrine stating that an offer is considered accepted once the acceptance is communicated through the mail, even if the offeror has not yet received it.