Question

A change in depreciation method is accounted for:Select one:a. Retrospectively.b. Prospectively, like changes in accounting estimates.c. As a cumulative adjustment to income in the year of change.d. None of the above.

Answer 1

Answer: :a. Retrospectively

Explanation:

A change in depreciation method is a change in accounting policy and as such it would need to be accounted for retrospectively.

This means that it must be accounted for by going back to all periods where the change affects an entry and adjusting that entry for the change so that the accounting can be more accurate.