When a Company Decides to Switch from the Double-Declining Balance

question 35

Multiple Choice

When a company decides to switch from the double-declining balance method to the straight-line method, this change should be handled as a

• A)change in accounting policy.
• B)change in accounting estimate.
• C)prior period adjustment.
• D)correction of an error.

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Definitions:

Additional Cost

Expenses incurred that are above and beyond the initial forecast or budget for a project or product.

Differential Revenue

The difference in revenue generated under two different scenarios or as a result of a specific action.

Additional Cost

Expenses incurred that are over and above the originally planned or estimated costs.

Selling Price

The amount at which a product or service is offered to customers for purchase.