When Estimates of Useful Life and Residual Value Made for the Purposes

question 50

Multiple Choice

When estimates of useful life and residual value made for the purposes of calculating depreciation, in later years turn out to be materially incorrect and the asset has not reached the end of its useful life, the procedure to be followed is to:

• A) issue corrected financial statements for all prior years.
• B) issue corrected financial statements for only the most recent three years.
• C) ignore the problem since estimates are not expected to be exact anyway.
• D) spread the remaining depreciable amount over the remaining useful life.

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Definitions:

Human Dignity

The inherent value and respect owed to each individual, recognizing their worth and rights.

Core Values

Fundamental beliefs or principles that guide an individual's or organization's actions and decision-making processes.

Caring Confrontation

A corrective action that is taken to support core values, such as truth, trust, and respect, while simultaneously preserving human dignity.

Positive Reinforcement

Occurs when desired behavior is followed by a reward, which increases the probability that the behavior will be repeated.