Enos Company Has Decided to Change the Estimate of the Useful

question 228

Multiple Choice

Enos Company has decided to change the estimate of the useful life of an asset that has been in service for 2 years. Which of the following statements describes the proper way to revise a useful life estimate?

• A) Revisions in useful life are permitted if approved by the IRS.
• B) Retroactive changes must be made to correct previously recorded depreciation.
• C) Only future years will be affected by the revision.
• D) Both current and future years will be affected by the revision.

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Definitions:

U.S. Army Corps

A federal organization responsible for public engineering, design, and construction management, including improvements to natural resources and infrastructure.

Wetlands

Areas of land designated by government agencies as protected areas that support wildlife and that therefore cannot be filled in or dredged by private parties.

Clean Water Act

United States federal law aimed at reducing pollution and protecting the nation’s waterways.

Discharge of Pollutants

The release of pollutants into the environment, often regulated by laws to prevent harm.