An Accounting Change That Requires the Retrospective Approach Is a Change

question 75

Multiple Choice

An accounting change that requires the retrospective approach is a change in

• A) the life of equipment from five to seven years.
• B) depreciation method from straight-line to double-declining-balance.
• C) he percentage used to determine the allowance for bad debts.
• D) the specific subsidiaries included in consolidated financial statements.t

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Definitions:

Equipment Trade

The act of exchanging one piece of business equipment for another, often to upgrade or replace assets.

Depreciation Expense

The portion of the cost of a fixed asset deducted as an expense over its useful life, reflecting the asset's consumption or wear and tear.

Common Stock

Shares of ownership in a corporation, granting holders voting rights and a share in the company's profits through dividends.