The Auditor May Conclude That Depreciation Charges Are Insufficient by Noting

question 71

Multiple Choice

The auditor may conclude that depreciation charges are insufficient by noting

• A) Insured values greatly in excess of book values.
• B) Large amounts of fully depreciated assets.
• C) Continuous trade-ins of relatively new assets.
• D) Excessive recurring losses on assets retired.

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Definitions:

Adjusting Entry

A journal entry made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Supplies Used

The cost of materials and supplies consumed during an accounting period in the course of operations.

Supplies Account

An account used in accounting to track the cost of supplies spent over a specific period.