Auditors may conclude that depreciation charges are too small by noting
A)Insured values much larger than book values.
B)Large numbers of fully depreciated assets.
C)Frequent trade-ins of relatively new assets.
D)Large and frequent losses on assets retired.

Question

Quizplus · Accepted Answer

Large and frequent losses on assets retired suggest that the depreciation charges were too small, as the book value of the assets was higher than their actual value at the time of retirement.

Auditors May Conclude That Depreciation Charges Are Too Small by Noting