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.

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Definitions:

Direct Exporting

The sale of products directly to customers or retailers in another country, without the involvement of intermediaries.

Increased Profits

A rise in the amount of net earnings gained from business operations after all costs have been subtracted.

Indirect Exporting

A form of exporting where a company sells its products to a third party, such as an export intermediary, who then sells the products in foreign markets.

Intellectual Property

Legal rights that result from intellectual activity in the industrial, scientific, literary, or artistic fields.