Which of the Following Is an Accurate Statement Regarding Assets

question 36

Multiple Choice

Which of the following is an accurate statement regarding assets and fraud risk?

• A) Companies will often capitalize repairs as fixed assets.
• B) Since fixed assets are often large, there is little theft of fixed assets.
• C) Intangible assets are recorded at cost and valuation issues therefore are not a fraud risk.
• D) Since companies have few fixed assets, there is no need for them to be periodically inventoried.

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Definitions:

Concrete Reasoning

Thinking based on the physical, tangible world and immediate experiences rather than abstraction or hypothetical scenarios.

Formal Reasoning

The process of logical thinking and problem-solving that follows established rules and procedures, typically associated with mature cognitive development.

Analytic Thought

A cognitive process that involves breaking down complex information or problems into smaller parts or basic principles for better understanding and problem-solving.

Deductive Reasoning

A logical process where a conclusion follows necessarily from the stated premises, moving from general premises to a specific conclusion.