The Most Common Audit Test to Verify Equipment Additions Is

question 88

Multiple Choice

The most common audit test to verify equipment additions is to

• A) examine vendors' invoices.
• B) perform an inventory of the fixed assets.
• C) confirm the additions with the vendors.
• D) trace the vendor invoices to the cash disbursements journal.

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Definitions:

Depreciable Assets

Tangible or intangible assets subject to depreciation, which involves allocating the cost of the asset over its useful life.

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life.

Book Value

The net value of an asset as recorded on the balance sheet, calculated as the original cost minus accumulated depreciation or amortization.

Gain Or Loss

The financial result that occurs when the selling price of an asset differs from its purchase price, either positive (gain) or negative (loss).