When Performing an Audit of the Property, Plant, and Equipment

question 24

Multiple Choice

When performing an audit of the property, plant, and equipment accounts, an auditor should expect which of the following to be most likely to indicate a departure from generally accepted accounting principles?

• A) Repairs have been capitalized to repair equipment that had broken down.
• B) Interest has been capitalized for self-constructed assets.
• C) Assets have been acquired from affiliated corporations with the related transactions recorded and described in the financial statements.
• D) The cost of freight-in on an acquisition has been capitalized.

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Definitions:

Team Cohesiveness

Reflects the bond that encourages members of a group to work together effectively, characterized by unity, trust, and a commitment to collective success.

Increased Interaction

a rise in the level of communication or engagement between entities or individuals.

Office Design

The arrangement and styling of the workplace, including spatial layout and choice of furnishings, intended to optimize productivity and wellbeing.

Cohesiveness

The degree to which members of a group or team are attracted to each other and motivated to stay in the group.