The Auditor for Universal Tools,Inc

question 57

Multiple Choice

The auditor for Universal Tools,Inc.discovered in 2017 that the warranty liability account showed a $25,000 debit balance.She reasoned that the correct treatment of this discovery is to ________.

• A)conduct a fraud investigation to see if a fraud has occurred
• B)make engineering investigate to see if there is a production failure
• C)wait until next year to see if the trend continues
• D)investigate and increase the warranty expense and liability to an appropriate level

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Definitions:

Fifth Amendment

A provision of the U.S. Constitution that provides for several rights of individuals against government actions, including self-incrimination and double jeopardy.

Federal Government

The national government of a federated state, which is responsible for the areas of governance assigned to it by the constitution.

State Governments

The governing bodies of individual states in a federal system, responsible for local law enforcement, education, and other intra-state issues.

Supreme Court

The highest judicial body in a jurisdiction, often having the final say in matters of law and constitutionality.