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:

Government Imposes

Refers to regulations, taxes, or policies that a government enforces or puts into effect in order to manage the country's affairs.

Floor

The minimum price or wage level that is legally or otherwise formally set, below which the actual price or wage cannot fall.

Equilibrium Price

The selling rate at which the number of products on offer is the same as the number of products wanted.

Equilibrium Quantity

The quantity of a product or service at which the quantity supplied is equal to the quantity demanded at the market price.