Which of the following accounts should be reviewed by the auditor to gain reasonable assurance that additions to property,plant,and equipment are not understated? A)Depreciation. B)Accounts payable. C)Cash. D)Repairs and maintenance.

Question

Quizplus · Accepted Answer

To gain reasonable assurance that additions to property, plant, and equipment are not understated, the auditor should review the "Repairs and maintenance" account. Repairs and maintenance expenses are typically expensed when incurred; therefore, if the company is not capitalizing additions to property, plant, and equipment, it is likely that such additions will be reflected in the repairs and maintenance account. Reviewing this account can help the auditor identify any potential items that should have been capitalized but were not. The other options (Depreciation, Accounts payable, and Cash) are not directly related to the identification of understated additions to property, plant, and equipment.

Which of the Following Accounts Should Be Reviewed by the Auditor