Which of the Following Situations Has the Best Chance of Being

question 9

Multiple Choice

Which of the following situations has the best chance of being detected when a CPA computes the ratio of repairs and maintenance expense to the related property, plant, and equipment accounts, compares to prior years' ratios, and investigates all changes exceeding a fixed percentage?

• A)Depreciation has not been taken on some assets.
• B)The cashier began lapping accounts receivable in the current year.
• C)Because of worsening economic conditions, the current year provision for uncollectible accounts was inadequate.
• D)The company is failing to capitalize major repairs that increase the useful life of equipment.

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Definitions:

Critical Mass

A sufficient amount of something needed to maintain or start a process, especially in the context of nuclear reactions or creating social change.

Sample

A part of a population that is studied to reach conclusions about the entire population.

Case Study

A descriptive research method in which a single individual or a small number of persons are studied in great depth.

Naturalistic Study

Research conducted in a real-world setting without the manipulation or control of variables, observing natural behaviors.