The Auditor Has Conducted Tests of Controls of the Write-Off

question 53

Multiple Choice

The auditor has conducted tests of controls of the write-off of accounts receivable and found two exceptions.These exceptions are

• A)an indication of the likelihood of errors or fraud and other irregularities.
• B)confirmation that controls are not functioning as designed throughout the year.
• C)information about the quantity of the dollar error in accounts receivable.
• D)indications that employee training is required in the accounting area.

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Definitions:

Straight-Line

A method of calculating depreciation of an asset, which allocates an equal amount of depreciation to each year of the asset's useful life.

Sum-Of-Years' Digits

A depreciation method that accelerates the expense recognition, using a decreasing fraction of years remaining over the sum of the years' digits.

Double-Declining Balance

A method of accelerated depreciation which doubles the normal depreciation rate, reducing the asset's book value more quickly in its early years.

Salvage Value

The estimated residual value of an asset at the end of its useful life.