When There Is a Change Made to the Useful Life

question 35

Multiple Choice

When there is a change made to the useful life of an asset:

• A) it must be recognised as a change in an accounting estimate and the impact of the reported change must be disclosed in the notes to the accounts.
• B) it must be recognised as an error and all previous financial statements must be restated.
• C) it must be recognised as an error and opening retained earnings and opening balances of the asset must be restated.
• D) it is recognised as a change in an accounting estimate and the opening retained earnings and opening balances of the asset must be restated.
• E) it is ignored.

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Definitions:

Trade Deficit

A situation where a country's imports exceed its exports over a given period, leading to more money leaving the country than coming in.

Mixed Economy

An economic system combining elements of both capitalism and socialism, with some sectors privately owned and others controlled by the government.

Economy

The system by which goods and services are produced, distributed, and consumed within a particular country or region.

Particular Society

A specific group of people characterized by distinct social institutions, traditions, and cultural practices.