Once the Estimated Depreciation for an Asset Is Calculated

question 31

Multiple Choice

Once the estimated depreciation for an asset is calculated

• A)It cannot be changed due to the historical cost principle
• B)It may be revised based on new information
• C)Any changes are accumulated and recognized when the asset is sold
• D)The estimate itself cannot be changed,however,new information should be disclosed in financial statement footnotes
• E)It may be revised based on new information and any changes are accumulated and recognized when the asset is sold

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with fixed dividends.

Selling

The process or act of offering goods or services in exchange for money or other compensation.

Tax Rate

The percentage at which an individual or corporation is taxed, with the rate often varying based on income or profit levels.

Beta

A measure of a stock's volatility in comparison to the overall market, indicating its relative riskiness.