Which One of the Following Approaches Does Not Represent How

question 111

Multiple Choice

Which one of the following approaches does not represent how the auditor will become aware of risks associated with long-lived assets?

• A)Obtaining knowledge of the client business.
• B)Reviewing the business plan related to major acquisitions.
• C)Reviewing the minutes of board of directors' meetings.
• D)All represent how the auditor will become aware of risks associated with long-lived assets and related expenses.

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Definitions:

Straight-Line Method

A depreciation technique that allocates an equal amount of depreciation each year over an asset's useful life.

Scrap Value

The estimated value that an asset will realize upon its sale at the end of its useful life.

Units-Of-Production Method

A method for determining depreciation that distributes depreciation based on how much the asset is used.

Scrap Value

Scrap value is the estimated residual value of an asset at the end of its useful life, typically in terms of its material components.