Which of the Following Accounts Would Most Likely Be Reviewed

question 41

Multiple Choice

Which of the following accounts would most likely be reviewed by the auditor to gain reasonable assurance that additions to property,plant,and equipment are not understated?

• A) Depreciation expense.
• B) Accounts payable.
• C) Cash.
• D) Repairs and maintenance expense.

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Definitions:

Capacity

The maximum output that a company can produce under normal conditions over a certain period.

Predetermined Overhead Rate

A rate calculated at the beginning of a period, used to allocate overhead costs to products based on a particular activity base.

Machine-Hours

A metric assessing the amount of produced goods or operations based on machines' operation duration.

Automated Lathe

A computer-controlled machine used for shaping materials, like metal or wood, by removing excess material.