A change in the residual value of equipment is accounted for:
A)As a prior period adjustment.
B)Prospectively.
C)Retrospectively.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

A change in the residual value of equipment is accounted for prospectively, meaning that it is reflected in future accounting periods and does not affect past financial statements. This is because the change in the residual value does not correct a previously recorded error or result from a change in accounting principle.

A Change in the Residual Value of Equipment Is Accounted