A Change in the Estimated Residual Value of a Plant

question 33

True/False

A change in the estimated residual value of a plant asset requires a restatement of prior years' depreciation.

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Definitions:

Shipping Costs

Expenses associated with transporting goods from one location to another, often considered part of the cost of sales or inventory.

Sales Tax

A mandatory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund various public expenditures. In this context, it specifically refers to a tax on sales of goods and services.

Ordinary Repairs

Expenditures to maintain an asset in its normal operating condition without significantly extending its useful life or altering its capacity.

Double-declining-balance Method

An accelerated method of depreciation that counts as an expense twice the straight-line depreciation rate for the declining book value of the asset each year.