When a Firm Changes Only the Estimated Residual Value of Equipment

question 136

Multiple Choice

When a firm changes only the estimated residual value of equipment:

• A) Depreciation must be recomputed for each previous year based on the new residual value.
• B) The remaining book value, reduced by the new residual value, is the basis for subsequent depreciation.
• C) The original cost, reduced by the new residual value, is the basis for subsequent depreciation.
• D) No adjustment is needed.

---

Definitions:

Jews

An ethnoreligious group originating from the Israelites or Hebrews of the ancient Near East, adhering to Judaism.

Diamond Necklace Affair

A scandal in 18th-century France involving a fraudulent transaction of an expensive diamond necklace, which tarnished the reputation of Queen Marie Antoinette.

Cardinal

A senior ecclesiastical leader, appointed by the Pope, and typically in charge of overseeing a particular department of the Catholic Church's administration.

Queen Marie-Antoinette

The last Queen of France before the French Revolution, known for her extravagant lifestyle and executed by guillotine in 1793.