Which of the Following Would Generally Not Be a Component
Which of the following would generally not be a component of the audit of the acquisition and payment cycle?
A) Adequacy of controls over acquisitions of long-lived assets
B) Tracing disposals of long-lived assets to the fixed asset master file
C) Determining the adequacy of the funds available for capital expenditures
D) Reperformance of recorded depreciation expense
Normally it may be unnecessary to examine supporting documentation for each addition to property,plant,and equipment,but it would be customary to verify:
A) all large transactions.
B) all unusual transactions.
C) a representative sample of typical additions.
D) all three of the above.
The auditor must know the client's capitalization policies to determine whether acquisitions are:
To be capitalized as part of property,plant and equipment,assets must:
A) have expected useful lives of more than one year.
B) not be acquired for resale.
C) be useful in multiple productive capacities within the organization.
D) A and B, but not C.