The Statement About Inherent Risk Assessments for Property, Plant and Equipment

question 27

Multiple Choice

The statement about inherent risk assessments for property, plant and equipment that is inaccurate is:

• A) Inherent risk is normally low for the presentation and disclosure assertion for PPE assets acquired under finance leases.
• B) Inherent risk is normally low for the existence assertion in a merchandising entity because PPE assets are not generally vulnerable to theft.
• C) Inherent risk is normally moderate to high for the existence assertion in a manufacturing entity because scrapped or retired PPE assets may not be written off the books.
• D) Inherent risk is normally low for the valuation and allocation assertion when PPE assets are purchased for cash.

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Definitions:

Run-Time Allocation

The process of allocating memory during the execution of a program, typically using functions like malloc() in C.

Self-Referencing Structures

Data structures in programming that contain references to instances of the same structure, enabling recursive relationships.

NULL Pointer

A pointer that does not point to any object or function, effectively representing the absence of a value or a null reference.

Sentinel

A special value used in programming to indicate the end of a data structure, such as an array or list.