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:

Planetary Gearset

A compact, round gear system that consists of a central sun gear, ring gear, and several planet gears that orbit the sun gear, used for transmission systems to provide multiple gear ratios.

Torque Converter

A type of fluid coupling used in automatic transmissions to transfer rotating power from the engine to the transmission.

Planetary Gearset

A mechanical system that consists of one or more outer gear wheels (planet gears) revolving around a central (sun) gear.

Carrier

A part of a vehicle’s differential that houses the differential gears, supporting them and distributing torque to the wheels.