Which of the Following Independent Checks Would Be Part of the Internal

question 24

Multiple Choice

Which of the following independent checks would be part of the internal controls for fixed assets?

• A)Comparing actual fixed asset expenditures with the capital budget.
• B)Periodic counts of fixed assets should be made by someone not otherwise responsible for fixed asset related activities.
• C)Physical counts should be reconciled with the accounting records.
• D)Book value of the assets should be compared to the insurance records.

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Definitions:

Economic Substance

A principle that transactions should reflect their true economic purpose, not just their legal form.

Faithful Representation

Faithful Representation refers to financial information that accurately reflects an entity's financial performance, position, and changes in financial position.

Plant And Equipment

Long-term tangible assets used in the operations of a business, not intended for resale.

Useful Lives

The expected period of time during which an asset is expected to be usable for the purpose it was acquired.