Once the Estimated Depreciation Expense for an Asset Is Calculated

question 106

Multiple Choice

Once the estimated depreciation expense for an asset is calculated:

• A) The estimate itself cannot be changed; however, new information should be disclosed in financial statement footnotes.
• B) Any changes are accumulated and recognized when the asset is sold.
• C) It may be revised based on new information.
• D) It cannot be changed, based on the historical cost principle.
• E) It cannot be changed, based on the consistency principle.

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Definitions:

Intellectual Property

Legal rights that arise from the intellectual creativity of a person or company, including inventions, literary and artistic works, symbols, names, and images.

Fees

Payments made to professionals or organizations in exchange for their services.

Revenue Streams

Various sources of income that a business receives from its normal business operations or other investments.

Bicycle Shop

A retail business specializing in the sale of bicycles, bicycle parts, and accessories, often offering repair services as well.