When a Company Decides to Switch from Deferring Development Costs

question 24

Multiple Choice

When a company decides to switch from deferring development costs to expensing them immediately, this change should probably be treated 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:

Restricts

Imposes limitations or conditions on actions, access, or behaviors, often through regulations, laws, or contracts.

Bankrupt

A legal status of a person or entity that cannot repay the debts it owes to creditors.

Necessaries

Basic essential goods required for living, which can include food, clothing, shelter, and healthcare, depending on the context.

Landlord

An individual or entity that owns property and rents it out to tenants, providing housing or commercial space in exchange for rent.