Which one of the following statements is true?
A)Using straight-line depreciation for all newly acquired assets when double-declining-balance depreciation was used in the past does not require a cumulative-effect adjustment.
B)An obvious error in recording depreciation expense in a prior year should be corrected by adjusting the current year's net income.
C)A change from straight-line to sum-of-the-years'-digits depreciation should be handled prospectively.
D)Changes in depreciation estimates are prior-period adjustments.

Question

Quizplus · Accepted Answer

A change in depreciation method is accounted for prospectively as a change in accounting estimate that is achieved by a change in accounting principle. Therefore, it does not require a cumulative-effect adjustment to the beginning balance of retained earnings.

Which One of the Following Statements Is True