Which of the Following Is an Example of a Change

question 135

Multiple Choice

Which of the following is an example of a change in accounting policy?

• A)Changing from weighted average to the first-in, first-out method of inventory valuation.
• B)Capitalizing a delivery truck that had previously been expensed.
• C)Using 5% for the allowance for bad debts because of the increased possibility of bankruptcy by customers.
• D)Using 4% for the allowance for bad debts, instead of 2% as stated in the company's procedures manual.

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Definitions:

Coefficient of Correlation

A statistical measure that calculates the strength and direction of a linear relationship between two variables, ranging from -1 to 1.

Risky Securities

Risky securities are investment products that come with a higher degree of uncertainty regarding their future value or return, often offering potentially higher rewards to compensate for the increased risk.

Linear Relationship

A relationship between two variables where the change in one variable is directly proportional to the change in another variable.

Reduction

A process or action that decreases the amount or size of something.