Once the Estimated Depreciation Expense for an Asset Is Calculated

question 29

Multiple Choice

Once the estimated depreciation expense for an asset is calculated:

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

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Definitions:

Contributory Pension Plans

Retirement plans where both the employer and employees contribute to the fund that will be used to provide retirement benefits to the employees.

Contributions

The act of giving or adding to something larger, often refers to financial contributions in a business or investment context but can also apply to contributions of time, effort, or resources.

Household Income

The combined gross income of all members of a household who are 15 years old and higher, regardless of their relationship.

Dental Care Insurance

A type of insurance coverage that pays for part or all of the costs associated with dental health, including preventive care, treatments, and surgeries.