Cloud Company Determines That the Future Undiscounted Cash Flow Generated

question 4

Multiple Choice

Cloud Company determines that the future undiscounted cash flow generated from the use of its fleet of small aircraft are less than carrying values.For impairment purposes,an auditor would wish to further obtain evidence regarding which of the following?

• A)parts inventory for the aircraft.
• B)an economic outlook for the company's stock.
• C)an independent valuation of the aircraft.
• D)the historical cost of the aircraft.

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Definitions:

Business

Organizational entities that are involved in the trade of goods, services, or both to consumers, with the primary purpose of earning profits.

Owners' Equity

The residual interest in the assets of an entity after deducting liabilities, essentially the net worth belonging to the owners.

Assets

Resources with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

Liabilities

Financial obligations or debts that a company owes to others, which need to be paid back in the future.