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Sagot :
The correct answer is B. Changes in depreciation methods are accounting changes that must be justified in the notes to the financial statements.
In accountancy, depreciation is a time period that refers to two components of the same idea: first, the actual lower of the honest cost of an asset, inclusive of the lower in the price of manufacturing facility equipment every 12 months as its miles used and worn, and 2nd, the allocation in accounting statements of the original price of the property to intervals in which the belongings are used (depreciation with the matching precept). Depreciation is technically a way of allocation, no longer valuation, although it determines the cost positioned at the asset within the stability sheet.
The depreciation fee does not require a present-day outlay of cash. however, the reason that depreciation is a rate to the P&L account, provided the employer is operating in a way that covers its charges (e.g. running at a profit) depreciation is a supply of cash in a declaration of coins flows, which generally offsets the cash price of obtaining new belongings required to hold operations while present assets reach the give up of their useful lives.
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Complete Question:
Which of the following accounting changes must be justified in the notes to the financial statements?
Multiple choice questions.
A) Changes in the remaining service life
B) Changes in depreciation methods
C) Changes in the estimated residual value
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