The Classes of Transactions Associated with the Audit of Plant

question 23

Multiple Choice

The classes of transactions associated with the audit of plant assets do not include:

• A) disposals of fixed assets.
• B) repair and maintenance transactions.
• C) depreciation expense.
• D) board minutes authorizing asset acquisitions.
• E) manufacture of fixed assets.

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Definitions:

Net Income

The net income a company earns following the deduction of all expenses and taxes from its total revenues.

Indirect Method

A technique used in cash flow statements to reconcile net income with cash flow from operating activities, by adjusting non-cash transactions and changes in working capital.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life in a systematic manner.