For a Company Using the Straight-Line Method of Depreciation That

question 36

Multiple Choice

For a company using the straight-line method of depreciation that changes the estimated useful life from 20 years to 15 years as at the beginning of the year,the accountant should do (or not do) the following:

• A)Compute current year depreciation as (carrying amount - residual value)divided by 20 years.
• B)Do not adjust prior year's depreciation.
• C)Adjust the amount of accumulated depreciation as at the beginning of the year.
• D)Compute current year depreciation as (carrying amount)X 15/20.

---

Definitions:

Minimum Reservation Point

is the lowest or least favorable outcome one is willing to accept in a negotiation or deal.

Maximum Reservation Point

The highest price a consumer is willing to pay for a good or service, beyond which they will choose not to purchase it.

Reservation Point

The least favorable point at which one will accept a deal during negotiations, beyond which they will walk away.

Bargaining Zone

A range within which an agreement is satisfactory to both parties involved in a negotiation process.