Byrd Company experienced an accounting event that affected its financial statements as indicated below:
Which of the following accounting events could have caused these effects on Byrd's statements?

A)Recognized depletion expense under the units-of-production method.
B)Recognized depreciation expense under the double declining balance method.
C)Amortized patent cost under the straight-line method.
D)All of these answer choices are correct.

Question

Byrd Company experienced an accounting event that affected its financial statements as indicated below:
Which of the following accounting events could have caused these effects on Byrd's statements?

A)Recognized depletion expense under the units-of-production method. 
B)Recognized depreciation expense under the double declining balance method. 
C)Amortized patent cost under the straight-line method. 
D)All of these answer choices are correct.

Quizplus · Accepted Answer

All of these events can affect the financial statements in the specified way. Depletion expense under the units-of-production method reduces the value of natural resources on the balance sheet and increases the cost of goods sold on the income statement. Depreciation expense under the double declining balance method reduces the value of property, plant, and equipment on the balance sheet and increases the depreciation expense on the income statement. Amortization of patent cost under the straight-line method reduces the value of intangible assets on the balance sheet and increases the amortization expense on the income statement.

Byrd Company Experienced an Accounting Event That Affected Its Financial