A Company Changes from the Straight-Line Method to an Accelerated

question 12

Multiple Choice

A company changes from the straight-line method to an accelerated method of calculating depreciation, which will be similar to the method used for tax purposes. The entry to record this change will include a

• A) credit to Accumulated Depreciation.
• B) debit to Retained Earnings in the amount of the difference on prior years.
• C) debit to Deferred Tax Asset.
• D) credit to Deferred Tax Liability.

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Definitions:

Portugal

Portugal is a southern European country on the Iberian Peninsula, known for its long history, cultural heritage, and significant contributions to world exploration.

Wine

An alcoholic beverage made by fermenting grapes or other fruits, with a rich history and variety across cultures.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing between multiple options.

Sweden

A Nordic country in Northern Europe, known for its high standard of living, well-developed welfare states, and neutral foreign policy stance.