An Entity Changed from the Straight-Line Method to the Declining

question 939

Multiple Choice

An entity changed from the straight-line method to the declining balance method of depreciation for all newly acquired assets. This change has no material effect on the current year's financial statements, but is reasonably certain to have a substantial effect in later years. If the change is disclosed in the notes to the financial statements, the auditor should issue a report with a(an) :

• A) "Except for" qualified opinion.
• B) Explanatory paragraph.
• C) Unqualified opinion.
• D) Consistency modification.

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Definitions:

Focus

The concentration of attention or energy on something specific.

Attention

The behavioral and cognitive process of selectively concentrating on one aspect of the environment while ignoring other things.

Eye-hand Coordination

The synchronized control of eye movement with hand movement, enabling tasks such as catching, throwing, and precise manipulation.

Categorization

An adaptive mental process in which objects are grouped into conceptual categories, allowing for organized storage of information in memory, efficient retrieval of that information, and the capacity to respond with familiarity to new stimuli from a common class.