Which of the following accounts would the auditor review in order to obtain reasonable assurance that additions to the equipment (fixed asset)account are not understated?
A)Amortization expense.
B)Gain on disposal of equipment.
C)Accounts payable.
D)Repairs and maintenance expense.

Question

Quizplus · Accepted Answer

The repairs and maintenance expense account would provide information on any work or upgrades done to the equipment during the year, which could represent additions to the equipment account. Reviewing this account would help the auditor obtain reasonable assurance that additions to the equipment account are not understated. Amortization expense and gain on disposal of equipment would not provide relevant information for this purpose, and accounts payable represents liabilities rather than asset additions.

Which of the Following Accounts Would the Auditor Review in Order