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

---

Definitions:

Passive Activity

An economic activity in which the taxpayer does not materially participate, often referring to certain rental activities or business ventures.

Tax Preference Items

Certain types of income, deductions, or credits that are treated favorably under the tax code to encourage specific activities or investments.

Nonrecourse Debt

A type of loan where the lender's recovery options in case of default are limited to seizing the collateral securing the loan, without pursuing further compensation from the borrower.

At-Risk

The term "at-risk" generally refers to the exposure to potential loss or damage, but in finance, it often involves the amount of money invested in a business venture to the extent that it can be lost.