Which of the Following Transactions Is an Auditor Most Likely

question 14

Multiple Choice

Which of the following transactions is an auditor most likely to examine when auditing the retained earnings account?

• A)Changing from one method of depreciation to another.
• B)Adjusting the percentage used to estimate the allowance for doubtful accounts.
• C)Changing from the FIFO to LIFO method of inventory valuation.
• D)Correcting an error in depreciation in a prior year.

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Definitions:

Quality Service

the measure of how well the service level delivered matches customer expectations.

Sustainable Competitive Advantage

A long-term strategy that cannot be easily duplicated by competitors, allowing an organization to perform better over time.

Human Resources

The department within an organization that deals with the management, support, and development of its employees.

Profitability

The degree to which a business or activity yields profit or financial gain.