A Change in the Estimated Useful Life and Residual Value

question 73

Multiple Choice

A change in the estimated useful life and residual value of machinery in the current year is handled as:

• A)A retrospective change back to the date of acquisition as though the current estimated life and residual value had been used all along.
• B)A prospective change from the current year through the remainder of its useful life, using the new estimates.
• C)A cumulative adjustment to income in the current year for the difference in depreciation under the new vs.old estimates.
• D)None of these is correct.

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Definitions:

Melatonin

A hormone produced by the pineal gland that regulates sleep cycles.

Pineal Gland

The pineal gland is a small endocrine gland in the brain that produces melatonin, which regulates sleep patterns and circadian rhythms.

Anterior Lobe

The anterior lobe refers to the front part of an organ or gland, often used in reference to the anterior lobe of the pituitary gland which secretes various hormones.

Luteinizing Hormone

A hormone produced by the anterior pituitary gland that triggers ovulation and controls the menstrual cycle in females, and stimulates sperm production in males.