An Audit Team Testing Long-Term Investments Would Ordinarily Use Analytical

question 73

Multiple Choice

An audit team testing long-term investments would ordinarily use analytical procedures to ascertain the reasonableness of the

• A) Existence of unrealized gains or losses.
• B) Completeness of recorded investment income.
• C) Classification as available-for-sale or trading securities.
• D) Valuation of trading securities.

---

Definitions:

Depreciable Cost

The cost of a fixed asset minus its salvage value, representing the total amount that can be depreciated over its useful life.

Constant Percentage

A fixed rate applied uniformly across a set of variables or values, often used in finance and mathematics.

Salvage Value

The estimated resale value of an asset at the end of its useful life, often considered for depreciation calculations.

Depreciation

Depreciation is the systematic allocation of the cost of a tangible asset over its useful life to reflect its decrease in value due to wear and tear, age, or obsolescence.