Which of the Following Is TRUE When the Estimate of an Asset's

question 26

Multiple Choice

Which of the following is TRUE when the estimate of an asset's useful life is increased?

• A) The new estimate is ignored until the last year of the asset's life.
• B) Annual depreciation expense is increased for the remaining years of the asset's life.
• C) Prior years' financial statements must be restated.
• D) Annual depreciation expense is decreased for the remaining years of the asset's life.

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Definitions:

Legal Sufficiency

The adequacy of evidence or legal grounding in an agreement, claim, or defense that meets minimum legal standards to proceed or withstand scrutiny in a court of law.

Legal Right

An entitlement derived from a legal system that allows or empowers a person to act in a certain way or requires others to interact with the person according to specified rules.

Binding Contract

An agreement between parties that is legally enforceable in a court of law.

Promissory Estoppel

Promissory estoppel is a legal doctrine that can enforce a promise in the absence of a formal contract when a party has relied on that promise to their detriment.