Revising an Estimate of the Useful Life or Salvage Value

question 233

True/False

Revising an estimate of the useful life or salvage value of a plant asset is referred to as a change in accounting estimate and is reflected in the current, and future financial statements.

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Definitions:

Declaration of Solvency

A formal statement made by the directors of a company declaring that the company can meet its debts as they fall due.

Members' Voluntary Winding Up

is a process initiated by the shareholders of a solvent company to voluntarily dissolve the entity and distribute its assets.

Insolvent Company

A company that cannot pay its debts as they come due or has liabilities exceeding its assets.

External Auditor

A professional firm or individual outside of an organization hired to examine its financial records and attest to the accuracy of its financial statements.