A Company Changes from Straight-Line to an Accelerated Method of Calculating

question 43

Multiple Choice

A company changes from straight-line to an accelerated method of calculating depreciation, which will be similar to the method used for tax purposes.The entry to record this change should include a

• A)credit to Accumulated Depreciation.
• B)debit to Retained Earnings in the amount of the difference on prior years.
• C)debit to Deferred Tax Asset.
• D)credit to Deferred Tax Liability.

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Definitions:

Price Sensitivity

The degree to which the price of a product or service affects consumers' purchasing behaviors or demand for that product or service.

Elastic

Describes a situation in economics where the demand or supply for a product changes significantly when its price changes.

Inelastic

Refers to a market for a product or service that is price insensitive; that is, relatively small changes in price will not generate large changes in the quantity demanded.

Products

Items or services offered by a business to customers, which can include physical goods, services, and digital products.