A Change in an Accounting Estimate Is

question 86

Multiple Choice

A change in an accounting estimate is:

• A)Reflected in past financial statements.
• B)Reflected in future financial statements and also requires modification of past statements.
• C)A change in a calculated amount that is part of current and future financial statements that results from new information or subsequent developments and from better insight or improved judgment.
• D)Not allowed under current accounting rules.
• E)Considered an error in the financial statements.

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Definitions:

Progressive Tax

A tax system in which the tax rate increases as the taxable base amount increases, meaning higher earners pay a higher percentage of their income in taxes.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the percentage of additional income that will be taken as tax.

Income Increases

A rise in the amount of money received, especially on a regular basis, by an individual or group.

Progressive Tax

A tax system in which the tax rate increases as the taxable amount increases, thereby imposing a higher percentage rate on higher-income earners.