For a Company Using the Straight-Line Method of Depreciation That

question 27

Multiple Choice

For a company using the straight-line method of depreciation that changes the estimated useful life from 20 years to 15 years remaining as at the beginning of the year, the accountant should do the following:

• A)Compute current year depreciation as (carrying amount - residual value)divided by 15 years.
• B)Adjust prior year's depreciation.
• C)Adjust the amount of accumulated depreciation as at the beginning of the year.
• D)Compute current year depreciation as (carrying amount)X 15/20.

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Definitions:

Subsequently Enacted Law

A law that is passed and comes into effect after a specific event or previously existing law.

Illegal Performance

An action or service that cannot be legally rendered or provided in a contract due to violating laws or regulations.

Objective Impossibility

A legal concept signifying a situation where the fulfillment of a contractual obligation or duty cannot be completed by anyone due to external circumstances beyond control.

Financial Inability

Financial inability refers to a state where an individual or entity cannot fulfill financial obligations or make payments due to insufficient funds or assets.