FIN Exam 3

like ass est

Accounting standards describe different acceptable valuation methods for intangible assets, but if a market price is not available, they all rely heavily on ______.

current

Accounts receivable and inventory provide economic benefits for less than a year and are therefore classified as assets. (Enter only one word per blank.)

rights an ob

As part of the testing of property, plant, and equipment, the auditor examines property deeds or title documents for proof of ownership. The auditor is most likely testing ______.

examine

As part of the testing of rights and obligation for property, plant, and equipment, the auditor might ______. Multiple choice question.

classification

As part of the testing of the purchasing process, the of a transaction into the correct property, plant, and equipment account is normally

intangible

Assets that provide economic benefit for longer than a year but lack physical substance are assets. (Enter only one word per blank.)

immaterial low

Because misstatements detected for prepaid expenses are generally ______ in amount, the inherent risk is generally assessed as ______.

all...recorded

Comparing detailed records in the subsidiary ledger with the existing capital assets is done to ensure that ______. Multiple choice question.

completeness

Ensuring that the entity's impairment-testing procedures include all intangible assets is the auditor's primary concern relative to the

existence

Examining customer order information or sending confirmations to customers requesting information on their order status address the ______ assertion as related to customer backlogs. Multiple choice question.

inventory

For most entities, the account balance most likely to be the highly material is ______.

marketing customer artistics

General categories of intangible assets include ______.

completeness

If the auditor physically examines a sample of assets and traces them into the property, plant and equipment subsidiary ledger, (s)he has sufficient evidence supporting the assertion.

fair value transactions accounting

Intangible asset:

determine perform initially

Judgment is required to ______.

occur occur

Large capital asset transactions generally ______. Multiple select question.

accuracy

Obtaining a lead schedule and detailed schedules for additions and dispositions, footing the lead schedule, agreeing individual accounts to the general ledger and testing the detailed schedules is done to verify ____

not highly verified using sub

On most audit engagements, prepaid expenses, deferred changes and intangibles assets are:

current fair value

Once an intangible asset is determined to be impaired the ______. Multiple choice question.

are recorded

Periodic reconciliation of the property, plant, and equipment subsidiary ledger to the general ledger control accounts is done to ensure that all capital assets ______. Multiple choice question.

sub

Reviewing capital budgets and comparing amounts spent with amounts budgeted are examples of ______. Multiple choice question.

computing computing

Substantive analytical procedures used to test prepaid insurance include ______.

verifying examining

Testing the classification assertion includes ______.

existence completeness

The auditor can test the and of insurance policies by sending a confirmation to the entity's insurance brokers. (Enter only one word per blank.)

existence

The auditor normally tests for the of intangible assets at the time they are acquired by examining legal documentation support the validity of the asset. (Enter only one word per blank.)

accuracy

The auditor obtains a lead schedule and detailed schedules for additions and dispositions of assets to verify the assertion for property, plant and equipment. (Enter only one word per blank.)

self lease

The complex accounting issues often involved in property, plant, and equipment includes issues surrounding ______.

occurrence authorization

The control activities for the and assertions of property management are normally part of the purchasing process. (Enter only one word per blank.)

completeness

The control activities used in the purchasing process for ensuring fdsaBlank 1Blank 1 fdsa , Incorrect Unavailable provide some assurance that all capital asset

likely less

The evidence indicates that the property, plant, and equipment accounts are not materially misstated when the ______ misstatement. Multiple choice question.

low

The inherent risk for prepaid expenses would generally be assessed as ______.

low

The inherent risk for prepaid expenses would generally be assessed as ______. Multiple choice question.

inventory AR

The major current assets included in the financial statements of many entities are ______.

valuation

The most important assertion associated with intangible assets is ______. Multiple choice question.

there are few the amount

The prepaid insurance account is often verified using substantive analytical procedures because ______.

there are few the amount reported

The prepaid insurance account is often verified using substantive analytical procedures because ______.

obtains listing physically examines capital assets

To test existence of property, plant, and equipment, the auditor ______.

marketing

Trademarks, brand names, and internet domain names are categorized as ______ intangible assets. Multiple choice question.

true

True or false: Types of property, plant, and equipment transactions include leasing and depreciation. True false question.

dis lease dep

Types of property, plant, and equipment transactions that may occur include ______.

testing

When an auditor is considering the significant management assumptions used in determining fair value, the auditor is most likely ______.

existence

When an auditor sends a confirmation to the entity's insurance broker requesting information on each policy number, coverage, expiration date, and premium, the auditor is testing ______.

ratio of dep

When an entity has disposed of few assets, an auditor would be most likely to perform additional audit procedures when the: Multiple choice question.

considers verifies tests

When considering management policies and procedures for impairment testing, the auditor should ensure that management ______.

verify dis

When testing existence, the auditor must ______.

reason

When testing the valuation of intangible assets, the auditor must also test for the ______. Multiple choice question.

physically

Which of the following is a procedure the auditor can use to gain assurance about the completeness assertion for property, plant, and equipment?

sub complexity

Why are lease transactions considered a complex accounting issue?

fair value

With the movement towards more accounting, auditors needs improved understanding of valuation issues. (Enter only one word per blank.)

existence

the auditor normally tests for the of intangible assets at the time they are acquired by examining legal documentation support the