Free LSAT Practice Question

Question 1 of 1
ID: LSAT-LR-101
Section: Logical Reasoning
Topic: Principle
Difficulty level: Hard

Practice Mode: Single selected Question » Back to Overview

Principle: A firm that changes its method of valuing an asset class must restate the previous year's figures for that class on the new method. Where the change was required by a revision to the standards rather than chosen, the firm must not restate but must state instead what those figures would have been on the old method.

Which one of the following judgements conforms most closely to the principle above?

AVantry, when a revision to the standards required a new basis for its long-term contracts, used it for short-term ones too, restated neither, gave old-basis figures for both, and complied.

BMarrable changed how it values its stock and set out the directors' reasons in a note; it need not have done more.

CCawdrey adopted a new basis for its long-term contracts because a revision to the standards required it, so need not restate last year's figures, only say what they would have been on the old basis.

DHesketh changed method twice in three years, restating each time; as the principle allows only one, the second restatement was improper.

EDenby, required by the standards to value its plant on a new basis, restated last year's figures and gave old-basis ones; it complied.

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