Which of the following is a change in an accounting estimate?

I. A change from straight-line depreciation to declining balance method
II. A change in estimated salvage value of depreciable asset
III. A change in estimated useful life of an asset
IV. Recording depreciation for the first time on machinery purchased five years ago

A)I, II, III, and IV
B)II, III, and IV
C)I, III, and IV
D)II and III

Question

Which of the following is a change in an accounting estimate?

I. A change from straight-line depreciation to declining balance method
II. A change in estimated salvage value of depreciable asset
III. A change in estimated useful life of an asset
IV. Recording depreciation for the first time on machinery purchased five years ago

A)I, II, III, and IV
B)II, III, and IV
C)I, III, and IV
D)II and III

Quizplus · Accepted Answer

Changes in estimated salvage value and estimated useful life of an asset are considered changes in accounting estimates. Changing depreciation methods is a change in accounting principle, and recording depreciation for the first time is a correction of an error, not a change in estimate.

Which of the Following Is a Change in an Accounting