Flynn 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 Flynn's statements?
A) Recognized depletion expense on a copper mine.
B) Recognized depreciation expense under the double declining balance method.
C) Amortized patent cost under the straight-line method.
D) All of these.

Question

Flynn 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 Flynn's statements?
A) Recognized depletion expense on a copper mine. 
B) Recognized depreciation expense under the double declining balance method. 
C) Amortized patent cost under the straight-line method. 
D) All of these.

Quizplus · Accepted Answer

All of the given options result in the effects shown in Flynn's financial statements. Recognizing depletion expense on a copper mine would reduce the value of the company's assets (property, plant, and equipment), and recognizing depreciation expense under the double declining balance method would reduce the value of the assets over time. Amortizing patent cost under the straight-line method would gradually reduce the value of the patent asset on the balance sheet. Therefore, any of these events could have caused the changes in Flynn's financial statements.

Flynn Company Experienced an Accounting Event That Affected Its Financial