In Violation of Company Policy, Morley Ltd (Morley) Erroneously Capitalised

question 26

Multiple Choice

In violation of company policy, Morley Ltd (Morley) erroneously capitalised the cost of painting its warehouse.The auditor examining 'Morley's financial report would most likely detect this when:

• A)examining maintenance expense accounts.
• B)observing during the physical inventory observation that the warehouse had been painted.
• C)examining the construction work orders supporting items capitalised during the year.
• D)discussing the capitalisation policies with 'Morley's financial controller.

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Definitions:

Criterion-related

Pertains to a method of evaluating the validity of a test by comparing its results with an external criterion.

Contexts

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Generalizable

A quality of research findings or data that allows conclusions to be extended from the sample studied to larger populations or other contexts.

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Occurring or happening simultaneously.