Emmanuela Zhang Was Explaining the Importance of Analytical Procedures to Her

question 36

Multiple Choice

Emmanuela Zhang was explaining the importance of analytical procedures to her staff. She made two statements:
(i) Analytical procedures are conducted throughout an audit.
(ii) Analytical procedures are an efficient method for estimating account balances.

• A) Both statements are correct.
• B) Neither statement is correct.
• C) Only statement (i) is correct.
• D) Only statement (ii) is correct.

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Definitions:

Double-declining-balance Method

A method of accelerated depreciation which doubles the straight-line depreciation rate, applying it against the un-depreciated balance each year.

Depreciation Schedule

A table detailing the periodic depreciation expense for an asset over its useful life.

Annual Depreciation

The process of allocating the cost of a tangible asset over its useful life on a yearly basis.

Useful Service Life

The estimated period over which a fixed asset is expected to be usable by the company.