A Change in the Salvage Value of an Asset Depreciated

question 7

Multiple Choice

A change in the salvage value of an asset depreciated on a straight-line basis and arising because additional information has been obtained is

• A) An accounting change that should be reported in the period of change and future periods of change if the change affects both
• B) An accounting change that should be reported by restating the financial statements of all prior periods presented
• C) A correction of an error
• D) Not an accounting change

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Definitions:

Producer Surplus

The difference between the amount producers are willing to sell a good for and the actual amount they receive.

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices.

Market

Any structured exchange where buyers and sellers interact to trade goods, services, or information.

Price

The capital amount projected, necessary, or handed over in trade for something.