If the Estimated Useful Life of an Asset Was Originally

question 30

Multiple Choice

If the estimated useful life of an asset was originally 10 years and then later changed to 12 years,the effects of this change should be:

• A) Reported as a special item on the income statement in the year it occurs.
• B) Spread over the current and future periods.
• C) Reported and recorded retrospectively, including pro forma financial statements in the year of change.
• D) Recorded in an adjustment to the Accumulated Depreciation account and the Retained Earnings account in the year of change.

Understand how to calculate changes in purchasing power due to inflation or deflation.

Learn the process of adjusting wages or other financial figures for inflation using the CPI.

Recognize the major categories in consumer spending and their impact on the CPI.

Understand the role of quality changes and consumer choice in the calculation of the CPI.

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Definitions:

Sociological Approach

A method of understanding human society and social behavior by examining social structures, interactions, and institutions.

"American Dream"

The belief that all American citizens ought to have the same chance to attain success and prosperity by means of dedication, effort, and taking steps on their own initiative.

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The frequency at which crimes occur in a specific area during a set period.

Strain Theory

A sociological theory that posits societal structures may pressure citizens to commit crimes by placing emphasis on goals that are not achievable through legitimate means for everyone.