In the Year of a Change in an Accounting Policy

question 114

True/False

In the year of a change in an accounting policy, the change and its impact must be disclosed in the notes to the financial statements.

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Definitions:

Cash Operating Expenses

Costs directly associated with the operation of a business that require cash payment, excluding non-cash expenses such as depreciation.

Simple Rate

A term not commonly used in a standard context, possibly referring to a basic interest rate in financial terms.

Salvage Value

The estimated resale value of an asset at the end of its useful life, used in calculating depreciation expenses.

Annual Depreciation

The portion of the cost of a fixed asset that is expensed each year over its useful life.