When a Company Changes from Straight-Line to the Declining Balance

question 24

Multiple Choice

When a company changes from straight-line to the declining balance method of accounting for depreciation,the financial statements lack

• A)comparability.
• B)consistency.
• C)neutrality.
• D)faithful representation.

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Definitions:

Issue Value

The price at which a new issue of securities is offered for sale to the public or the nominal value of a security at the time of its issuance.

Zero

A numerical value representing nothing or the absence of any quantity.

American Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a specified asset at a certain price before the option expires.

Asset Price

The value at which an asset is bought or sold on the market.