2. Which of the following statement is true?a. Existence and valuation assertions related to long-lived assets areusually the most relevant assertions.b. A concern'regarding the existence of long-lived assets relates towhether management has properly recorded depreciation.c. Depletion expense is not an account that would be included whenauditing long-lived assets.d. All of the above statements are true.

Existence and valuation assertions related to long-lived assets are most relevant assertions because…

Answered: 2. Which of the following statement is…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 4CYBK

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Similar questions

Which of the following accounts would not be included in the Acquisition and Payment for Long-Lived Assets Cycle? a. Revenue b. Depreciation expense c. Gain on disposal d. Equipment
Which of the following represents an event that is less routine when accounting for long-term assets? A. recording an asset purchase B. recording depreciation on an asset C. recording accumulated depreciation for an asset or asset category D. changing the estimated useful life of an asset
Which of the following is true regarding special issues in accounting for long-term assets? A. An assets useful life can never be changed. B. An assets salvage value can never be changed. C. Depreciation expense calculations may need to be updated using new and more accurate estimates. D. Asset values are never reduced in value due to physical deterioration.
LO1 The purpose of depreciation is to record the assets market value in the accounting records.
Which statement about depreciation is false?a. A major objective of depreciation accounting is to allocate the cost of using an assetagainst the revenues it helps to generate.b. Depreciation should not be recorded in years in which the market value of the asset hasincreased.c. Obsolescence as well as physical wear and tear should be considered when determiningthe period over which an asset should be depreciated.d. Depreciation is a process of allocating the cost of an asset to expense over its usefullife.
Which one of the following disclousures is required by generally accepted accounting principle? a. Depreciation expense for each major class of asset b. Balances of major classes of depreciable assets, by nature or function c. Accumulated depreciation on each depreciable asset d. An explanation of why the depreciation method used was selected by management
Which of the following techniques can be used by management to overstate long-lived assets? *A. All of the aboveB. Record existing assets at amounts excluding incidental costsC. Include fictitious assets on the financial statementsD. Expense transactions that should be capitalized.
As generally used in accounting, what is depreciation? a. It is an accounting process which systematically allocates long-lived assets cost to accounting periodsb. It applies only to long-term lived intangible assetsc. It is a process of asset valuationd. It is used to indicate a decline in market value of a long-term lived asset
Which of the following statements related to long-lived assets is true? Depreciation is calculated the same for financial reporting purposes and income tax purposes. If a company changes a depreciation estimate, it does not require a prior period adjustment. Depreciation is the process to value an asset at its fair market value. There is only one test to record an asset's impairment.
Under the historical accounting system, depreciation is calculated on the original cost of fixed assets with the result that only an amount equivalent to the original cost of the fixed assets is available for its replacement when its life is over. This results in which of the following problem? a. Mixing up of the holding gains and operating gains b. Fixed assets values are unrealistic c. Return on capital employed misleading d. Insufficient provision of depreciation
15 - Which of the following statements about depreciation is false? a) Depreciation is a type of expense that does not require a cash outflow. B) As a result of use, wear, tear, depreciation or obsolescence must be experienced in the tangible asset. NS) The asset to be depreciated should be among the assets of the enterprise. D) Proportional depreciation method can be applied for all tangible fixed assets. TO) For a property, plant and equipment to be depreciated, its economic life must be more than one year.
According to IAS 16 Property, Plant and Equipment, which, if any, of the following statements about depreciation are correct? 1.The main purpose of depreciation is to reflect the fall in value of an asset over its useful life 2.When an asset is revalued, subsequent depreciation relating to the amount of the revaluation should be debited to the revaluation surplus rather than to the income statement 3.The provision for depreciation ensures that there are funds available to replace an asset when this becomes necessary, though in times of inflation, additional amounts may need to be set aside 4.A change in depreciation method constitutes a change in accounting policy and must be accounted for as such

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