Revising an Estimate of the Useful Life or Salvage Value

question 29

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 past,current,and future financial statements.

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Definitions:

Overhead Rate

A method for distributing overhead expenses to goods or services, usually depicted as a ratio or percentage.

Direct Labour

The labor costs of employees who are directly involved in the manufacturing or production process of goods.

Inventories

Assets held for sale in the ordinary course of business, or goods that will be used or consumed in the production of goods to be sold.

Trade Discounts

Discounts from the list price of a product given by a seller to a buyer, often based on the volume of purchase or early payment.