The Auditor Is Least Likely to Learn of Retirement of Equipment

question 32

Multiple Choice

The auditor is least likely to learn of retirement of equipment through which of the following?

• A)Reviewing the purchase return and allowance account.
• B)Reviewing depreciation.
• C)Analyzing debits to the accumulated depreciation account.
• D)Reviewing insurance policy riders.

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Definitions:

Assignment of Rights

The transfer of rights or interests in a contract or property from one party to another.

Breach of Contract

An act of failing to fulfill the terms and conditions as agreed upon in a contract, leading to legal action for redress.

Agent

One who acts under the direction of a principal for the principal’s benefit in a legal relationship known as agency. See also principal.

Gratuitous Assignment

A transfer of rights or property done freely without the expectation of receiving something in return.