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1. Which of the following is used to obtain evidence that the client’s equipment accounts are not understated? a.Analyzing repairs and maintenance expense accounts. b.Vouching purchases of plant and equipment. c.Recomputing depreciation expense. d.Analyzing the miscellaneous revenue account. 2.Analysis of which account is least likely to reveal evidence relating to recorded retirement of equipment? a.Accumulated depreciation. b.Insurance expense. c.Property, plant, and equipment. d.Purchase returns and allowances. 3.Which of the following explanations most likely would satisfy an auditor who questions management about significant debits to the accumulated depreciation accounts? a.The estimated remaining useful lives of plant assets were revised upward. b.Plant assets were retired during the year. c. The prior year’s depreciation expense was erroneously understated. d.Overhead allocations were revised at year-end. 4.In testing for unrecorded retirements of equipment, an auditor most likely would a.Select items of equipment from the accounting records and then locate them during the plant tour. b.Compare depreciation journal entries with similar prior year entries in search of fully depreciated equipment. c.Inspect items of equipment observed during the plant tour and then trace them to the equipment subsidiary ledger. d.Scan the general journal for unusual equipment additions and excessive debits to repairs and maintenance expense. 5.An auditor analyzes repairs and maintenance accounts primarily to obtain evidence in support of the audit assertion that all a.Noncapitalizable expenditures for repairs and maintenance have been recorded in the proper period. b.Expenditures for property and equipment have been recorded in the proper period. c.Noncapitalizable expenditures for repairs and maintenance have been properly charged to expense. d.Expenditures for property and equipment have not been charged to expense. 6.The auditor is most likely to seek information from the plant manager with respect to the a.Adequacy of the provision for uncollectible accounts. b.Appropriateness of physical inventory observation procedures. c.Existence of obsolete machinery. d.Deferral of procurement of certain necessary insurance coverage. Which account is least likely to be evaluated by the auditor to obtain evidence relating to retirement of property?Analysis of which account is least likely to reveal evidence relating to recorded retirement of equipment? Purchase returns and allowances.
What is generally considered to be the best method for finding unrecorded accounts payable?The primary method for testing the completeness of accounts payable is to search for unrecorded liabilities. This is done by obtaining a list of all cash disbursements made after year-end.
When confirming accounts payable The approach is most likely to be one of?When confirming accounts payable, the approach is most likely to be one of: Selecting the accounts with the largest balances at year-end, plus a sample of other accounts.
Which of the following pairs of accounts would an auditor most likely Analyse on the same working paper?Notes receivable and interest income. Answer (D) is correct. The auditor analyzes information and presents the analysis for related accounts on the same working paper. Notes receivable and interest on them are such related accounts.
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Analysis of which account is least likely to reveal evidence relating to recorded
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