A Change in the Estimated Useful Life and Residual Value

question 61

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 versus old estimates.
• D)None of the above is correct.

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Definitions:

HMO

A health maintenance organization; a type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO.

PPO

Preferred Provider Organization, a health insurance plan that offers a network of healthcare providers to choose from, typically at a lower cost.

Provider's Fee

The charge or cost set by a service provider, such as a doctor or a lawyer, for professional services rendered.

CMS-1500 Form

A standardized form used by healthcare providers to submit insurance claims for services provided to patients.