A Company Changes from Capitalizing and Amortizing Preproduction Costs to Recording

question 25

Multiple Choice

A company changes from capitalizing and amortizing preproduction costs to recording them as an expense when incurred, because future benefits associated with those costs have become doubtful.This accounting change should be recognized as a

• A)change in accounting estimate
• B)change in accounting principle
• C)change in reporting entity
• D)correction of an error

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Definitions:

Fecundity

Describes the reproductive capacity of an individual, such as the number and quality of eggs or sperm. As a measure of relative fitness, fecundity refers to the number of offspring produced by an organism.

Continual Reproduction

The ability of an organism to produce offspring repeatedly over its lifetime.

Mature At Birth

Refers to organisms that are born in an advanced state, with the ability to survive without parental care immediately.

Extrinsic Mortality

Refers to the death rate in a population due to external factors, such as predation, disease, or accidents, rather than aging or intrinsic biological factors.