For Each of the Following Tests,state Whether It Is a Test

question 35

Essay

For each of the following tests,state whether it is a test of details of account balances or a test of details of transactions.Then note for which property management assertion the test provides evidence.
Test depreciation calculations for a sample of capital assets
For assets written off,test amounts charged against income and accumulated depreciation
Physically examine the capital asset additions
Vouch transactions included in repairs and maintenance for items that should be capitalized
Vouch significant additions and dispositions to vendor invoices or other supporting documentation
Examine of confirm deeds or title documents for proof of ownership

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Definitions:

Operating Income

The profit realized from a business's operations after subtracting operating expenses from revenues.

Activity Level

Refers to the volume of production or the quantity of operations that influences costs in manufacturing or service delivery.

Net Operating Income

Profit generated from a company's core business operations, excluding deductions of interest and taxes.

Flexible Budget

A flexible budget adjusts based on changes in the volume of activity, allowing for a more accurate comparison of actual to budgeted performance.