Adjustment of the carrying amount of an asset or liability or the consumption of an asset is defined as,
A)A change in the accounting estimate
B)Accounting policies
C)Misstatements
D)Error

Question

Quizplus · Accepted Answer

A change in the accounting estimate involves adjustments to the carrying amount of an asset or liability, or the amount of the periodic consumption of an asset, reflecting new information or developments. This is distinct from accounting policies, which are the specific principles and methods a firm adopts for preparing its financial statements, and from misstatements or errors, which are inaccuracies resulting from oversight or misunderstanding.

Adjustment of the Carrying Amount of an Asset or Liability