Which of the Following Should Be Reported as an Adjustment

question 72

Short Answer

Which of the following should be reported as an adjustment to retained earnings?
$\begin{array}{llcc} \text { Change in Estimated Lives } & \text { Change from Unaccepted } \\ \underline{\text { of Depreciable Assets }} &\underline{ \text { Principle to Accepted Principle} } \\\end{array}$

a) $\begin{array}{llcc} \text {Yes}& \quad\quad\quad\quad\quad\quad\quad\quad\text {Yes}\end{array}$

b) $\begin{array}{llcc} \text {No}& \quad\quad\quad\quad\quad\quad\quad\quad\text {Yes}\end{array}$

c) $\begin{array}{llcc} \text {Yes}& \quad\quad\quad\quad\quad\quad\quad\quad\text {No}\end{array}$


d) $\begin{array}{llcc} \text {No}& \quad\quad\quad\quad\quad\quad\quad\quad\text {No}\end{array}$

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Definitions:

Present Value

The contemporary financial worth of a future sum or ongoing cash flows, evaluated at a designated rate of return.

Compounded Annually

A method of calculating interest where the interest earned each year is added to the principal, and the interest for the next year is calculated on the total amount.

Unamortized Discount

The portion of a bond discount that has not yet been charged to expense because the bond has not reached its maturity.

Times Interest Earned Ratio

A financial ratio that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes (EBIT) to its interest expenses.