A Change from the Straight-Line Method of Depreciation to an Accelerated

question 21

Multiple Choice

A change from the straight-line method of depreciation to an accelerated method should be accounted for as a(n)

• A) change in an accounting estimate.
• B) change in an accounting principle.
• C) prior period adjustment.
• D) accounting error.

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Definitions:

Consumer Surplus

The gap between the total amount consumers are prepared and able to spend for a product or service versus what they genuinely spend.

Maximum Price

The highest price that can legally be charged for a good or service, often set by government regulations to protect consumers from excessively high prices.

Market Failure

A situation in which the allocation of goods and services is not efficient, often leading to a net social welfare loss.

Consumer Surplus

The discrepancy in the overall amount consumers are inclined and able to expend on a product or service versus what they actually fork out.