In testing acquisitions the auditor needs to understand the appropriate accounting guidance related to acquisition accounting. Which of the following is NOT an accounting consideration for the auditor as regards to acquisition cost?
A) Inclusion of material transportation and installation costs
B) Recording of trade-in costs
C) Allocating costs when building and equipment are purchased at one price
D) Verifying that purchased equipment amounts correspond to the budgeted amount

Question

Quizplus · Accepted Answer

Verifying that purchased equipment amounts correspond to the budgeted amount is not an accounting consideration for the auditor as regards to acquisition cost. The other options are accounting considerations for the auditor when determining the acquisition cost.

In Testing Acquisitions the Auditor Needs to Understand the Appropriate