Which One of the Following Statements Is Not Correct

question 113

Multiple Choice

Which one of the following statements is not correct?

• A) A change from an inappropriate accounting principle to a proper one should be accounted for as an accounting error.
• B) Assets purchased on the 14^th of the month may be depreciated from the first of the month for practical reasons.
• C) Depreciation accounting is a process of allocation of periodic expense, rather than one of asset valuation.
• D) Use of straight-line depreciation gives a higher total expense than accelerated methods over the total useful life of the asset.

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Definitions:

Long-Term Debt

Loans and financial obligations lasting more than one year, used to finance a company's operations or expansions.

Direct Approach

A method in financial accounting that involves reporting major classes of gross cash receipts and payments, providing a clear view of a company's cash flow.

Indirect Approach

A method for preparing the cash flow statement where net income is adjusted for non-cash transactions, deferred taxes, and changes in working capital.

Investing Activities

Financial transactions and events involving the purchase and sale of long-term assets and investments, as reported in the cash flow statement.