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:

Forward Exchange Rate

The agreed-upon exchange rate for a currency to be exchanged on a future date.

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The current exchange rate at which one currency can be exchanged for another for immediate delivery.

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EUR

The primary currency for the Eurozone, adopted by 19 of the European Union's 27 nations.