In verifying accumulated depreciation, the credits to accumulated depreciation are verified as part of the audit of depreciation expense, whereas the debits are normally tested as a part of the audit of:
A) asset acquisitions.
B) disposal of assets.
C) capital acquisitions.
D) accumulated depreciation.

Question

Quizplus · Accepted Answer

The debits to accumulated depreciation are normally tested as a part of the audit of disposal of assets since the disposal of an asset triggers a reduction in the accumulated depreciation related to that asset. Therefore, it is essential to verify whether the accumulated depreciation recorded for the disposed asset was correctly reduced and whether any gain or loss on disposal was appropriately recognized. Testing the debits to accumulated depreciation as a part of the audit of disposal of assets also ensures that the company is not overstating the carrying value of its assets on the balance sheet.

In Verifying Accumulated Depreciation, the Credits to Accumulated Depreciation Are