A Weakness in Internal Control Over Recording Retirements of Equipment

question 2

Multiple Choice

A weakness in internal control over recording retirements of equipment may cause an auditor to

• A)Inspect certain items of equipment in the plant and trace those items to the accounting records.
• B)Review the subsidiary ledger to ascertain whether depreciation was taken on each item of equipment during the year.
• C)Trace additions to the "other assets" account to search for equipment that is still on hand but no longer being used.
• D)Select certain items of equipment from the accounting records and locate them in the plant.

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Definitions:

Sampling Distribution

Refers to a statistical distribution that represents all possible values of a statistic for a given size of samples drawn from a population.

Variability

The extent to which data points in a statistical distribution or dataset differ from each other.

Difference

In statistics, this refers to the subtraction of one value from another to determine the gap or extent of variation between them.

Directional Null Hypothesis

A type of null hypothesis that specifies the direction of the difference or association between two variables.