Describe Two Ways That We Forget

question 36

Essay

Describe two ways that we forget.Explain what causes each type of forgetting,and provide an example of each type of forgetting.

Recognize the costs included in the purchase of land and how these costs affect the carrying value of the asset.

Adjust estimated depreciation expense due to changes in asset life expectancy or residual value.

Understand the implications of changing accounting estimates on financial statements.

Calculate accumulated depreciation for assets under straight-line and accelerated depreciation methods.

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Definitions:

Unit Investment Trusts

An investment company offering a fixed portfolio of securities in a one-time public offering, with units redeemable on demand.

Short-selling

The practice of selling securities or other financial instruments that are not currently owned, with the intention of repurchasing them later at a lower price.

120/20 Fund

A type of mutual fund that employs a long/short strategy, allowing it to invest 120% in long positions and -20% in short positions.

Prospectus

A formal document that provides details about an investment offering for sale to the public.