When Auditing Expense Accounts,which of the Following Would the Auditor

question 51

Multiple Choice

When auditing expense accounts,which of the following would the auditor be least likely to subject to a detailed test of transactions?

• A)legal expense
• B)utilities expense
• C)repairs and maintenance expense
• D)travel expense

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Definitions:

Income Tax Expense

The cost of income taxes a company incurs, reflecting the taxes to be paid to taxation authorities and adjustments to deferred tax assets or liabilities.

Deferred Tax Assets

The amount of income tax recoverable in future reporting periods in respect of deductible temporary differences and tax losses.

Retained Earnings

The portion of net income that is retained by a company rather than distributed to its shareholders as dividends, which is reinvested into business operations.

Deferred Tax Assets

Financial assets that reduce future tax liability due to temporary differences between the ledger and tax basis of assets and liabilities, or the carryover of unused tax credits/deductions.