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.

---

Definitions:

Diode

An electronic component that allows current to flow in one direction only, functioning as a one-way valve in electrical circuits.

Negative Lead

An electrical connection that serves as the return path for current in a circuit, often marked with a minus (-) symbol or black color in electronics.

DMM

Digital Multimeter, an electronic measuring instrument that combines multiple measurement functions in one unit, such as voltage, current, and resistance.