The auditor is examining the accounting entries made to the accumulated depreciation account during the year and notices a significant amount of debits to the account.Which of the following provides the most logical explanation?
A)Large number of asset retirements
B)Salvage values were revised downward
C)Useful lives were revised downward
D)Allocation of fixed overhead were revised

Question

Quizplus · Accepted Answer

Significant debits to the accumulated depreciation account typically occur when a large number of assets are retired. This is because the cost of the retired assets is removed from the balance sheet as an expense, and the accumulated depreciation account must be adjusted to reflect the depreciation expense that has been recorded up to the date of retirement.

The Auditor Is Examining the Accounting Entries Made to the Accumulated