The Auditor Obtains Evidence Supporting the Notion That Proper Segregation

question 58

Multiple Choice

The auditor obtains evidence supporting the notion that proper segregation of duties exists by:

• A)personally observing the employees who apply the control procedures.
• B)reviewing job descriptions in the personnel department.
• C)preparing a flowchart of duties performed by personnel.
• D)performing tests to determine whether control procedures operated consistently throughout the period.

Understand the use of zero balance accounts and their benefits.

Learn metrics for measuring the efficiency of credit and collection management, like the average collection period.

Explore inventory management concepts relevant to financial management, including EOQ and carrying costs.

Calculate the operating cycle of a business.

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Definitions:

Depletion Expense

The allocation of the cost of natural resources, such as minerals, oil, or timber, over their productive life.

Salvage Value

Salvage value is the estimated residual value of an asset at the end of its useful life, determining how much it can be sold for or disposed of.

Double-Declining-Balance Depreciation

An accelerated depreciation method that doubles the depreciation rate of an asset, causing it to lose value quicker than under traditional linear depreciation methods.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into use.