If for a Class a Non-Current Asset an Entity Changes

question 17

Multiple Choice

If for a class a non-current asset an entity changes from using the sum-of-the-years-digits method to the straight-line method to allocate the depreciable amount, then:

• A)the change is applied retrospectively because it is a change in accounting policy
• B)the change is applied retrospectively because it must be a correction of a prior period error
• C)it is applied prospectively as it is a change in an accounting estimate
• D)is not permitted because it will conflict with the method applied in calculating the comparative amounts

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Definitions:

Estoppel

An equitable remedy that stops a party from trying to establish a position or deny something that, if allowed, would create an injustice.

Ratification

The action of officially approving or confirming an agreement or act, making it valid.

Apparent Authority

Authority as suggested to a third party by the conduct of a principal; may exist even when there is no actual authority.

Real Estate Salesman

A professional licensed to negotiate and arrange real estate sales; works under a broker's supervision.