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

question 18

Multiple Choice

Which of the following is true when the estimate of an asset's useful life is changed?

• A)The new estimate is ignored until the last year of the asset's life.
• B)The depreciation expense in the prior year is restated.
• C)Prior years' financial statements must be restated.
• D)Asset's remaining book value will be spread over the asset's remaining life.

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Definitions:

Inelastic

Describes demand or supply that is relatively unresponsive to price changes, meaning quantity demanded or supplied changes little when price changes.

Unitary Elasticity

A situation where a one percent change in the price of a product results in a one percent change in the quantity demanded.

Federal Excise Tax

A tax imposed by the federal government on the sale of specific goods and services, such as gasoline, cigarettes, and alcohol.

Tax Revenue

Income that the government receives from taxation of individuals and businesses.