Multiple Choice
Which of the following situations has the best chance of being detected when a CPA computes the ratio of repairs and maintenance expense to the related property, plant, and equipment accounts, compares to prior years' ratios, and investigates all changes exceeding a fixed percentage?
A) Depreciation has not been taken on some assets.
B) The cashier began lapping accounts receivable in the current year.
C) Because of worsening economic conditions, the current year provision for uncollectible accounts was inadequate.
D) The company is failing to capitalize major repairs that increase the useful life of equipment.
Correct Answer:
Verified
Correct Answer:
Verified
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