A Change in the Estimated Useful Life of Equipment Requires

question 152

Multiple Choice

A change in the estimated useful life of equipment requires

• A) a retroactive change in the amount of periodic depreciation recognized in previous years.
• B) that no change be made in the periodic depreciation so that depreciation amounts are comparable over the life of the asset.
• C) that the amount of periodic depreciation be changed in the current year and in future years.
• D) that profit for the current year be increased.

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Definitions:

Production Process

The Production Process involves the methods and sequences of activities used to transform inputs into finished goods or services.

Capital

Financial assets or physical resources that are used by businesses to produce goods and services and generate wealth.

Rich

Having a large amount of wealth or resources, enabling a higher standard of living and purchasing power.

U.S. Farmers

Individuals or enterprises in the United States engaged in the production of food, feed, fiber, and other goods by systematic raising of plants and animals.