Which of the Following Changes Would Be Accounted for Prospectively

question 119

Multiple Choice

Which of the following changes would be accounted for prospectively?

• A) Changing from declining-balance depreciation to straight-line depreciation
• B) Change in the expected life of a depreciable asset
• C) First time presentation of assumption financial statements with the FIFO cost flow
• D) Error corrections

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Definitions:

Variable Costs

Expenses that change in proportion to the amount of production or business operations.

Cost Estimation Methods

Techniques used to predict the expenses likely to be incurred in the manufacturing of a product or the execution of a project.

Cost Equation

An equation used to estimate costs, typically in the form of fixed costs plus variable costs times the number of units.

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as materials and labor.