Which of the Following Transactions Is an Auditor Most Likely

question 14

Multiple Choice

Which of the following transactions is an auditor most likely to examine when auditing the retained earnings account?

• A)Changing from one method of depreciation to another.
• B)Adjusting the percentage used to estimate the allowance for doubtful accounts.
• C)Changing from the FIFO to LIFO method of inventory valuation.
• D)Correcting an error in depreciation in a prior year.

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Definitions:

Line Length

A measurement that represents the distance from one end of a line to the other end.

Automatic Processing

The unconscious and involuntary operations of the mind that enable complex tasks or procedures to be performed without conscious thought.

Controlled Processing

Involves conscious, deliberate decision making and thought, requiring attention and effort.

Mindfulness

A mental state achieved by focusing one's awareness on the present moment, while calmly acknowledging and accepting one's feelings, thoughts, and bodily sensations.