Tennessee Company Violated Company Policy by Erroneously Capitalizing the Cost

question 22

Multiple Choice

Tennessee Company violated company policy by erroneously capitalizing the cost of painting its warehouse. The CPA examining Tennessee's financial statements would most likely learn of this error by:

• A)discussing Tennessee's capitalization policies with its controller.
• B)reviewing the titles and descriptions for all construction work orders issued during the year.
• C)observing during the physical inventory observation that the warehouse has been painted.
• D)examining in detail a sample of construction work orders.

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Definitions:

Attribution Theory

A social psychology theory that explains how individuals infer the causes of their own and others' behaviors and events, attributing them to either internal dispositions or external situations.

Judgments

The cognitive processes of forming opinions or conclusions based on information and reasoning.

Discrimination

Discriminatory behavior towards individuals based on their race, age, or sex, manifesting as prejudice and unfairness.

Prejudice

A preconceived opinion or judgment formed without adequate grounds or before sufficient knowledge.