Which of the Following Changes Should Be Accounted for Using

question 95

Multiple Choice

Which of the following changes should be accounted for using the retrospective approach?

• A) A change in the estimated useful life of a depreciable asset.
• B) A change from straight-line to declining balance depreciation.
• C) A change in accounting for long-term construction contracts by recognizing revenue over time rather than when the contract is completed.
• D) A change to LIFO method of costing inventories.

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Definitions:

Revenue

The total income generated by a business from its operational activities.

Sale

A transaction between two parties where the buyer acquires an asset from the seller for a specified amount of money.

Hammers

A tool typically used for driving nails into, or pulling them from, some other object. Generally, it involves a handle and a head.

Percent More

A comparative term describing an increase in quantity or amount expressed as a percentage over a referenced baseline value.