Which of the Following Would Not Be Used as a Substantive

question 64

Multiple Choice

Which of the following would not be used as a substantive analytical procedure related to depreciation expense and accumulated depreciation?

• A)Current depreciation as a percentage of previous year assets.
• B)Fixed assets as a percentage of previous year assets.
• C)Depreciation expense as a percentage of assets each year.
• D)Average age of assets.

---

Definitions:

Earnings

The profit a company makes after deducting its operating expenses, taxes, and costs from its revenue.

One-Period Valuation Model

A model for determining the current value of a stock based on the dividend expected at the end of one period and the anticipated selling price.

Risk-Free Rate

The theoretical rate of return of an investment with no risk of financial loss, typically represented by the yield on government bonds.

Expected Return

Expected return is the average amount of profit or loss an investment is projected to generate, based on historical data or statistical analysis.