Test Bank: Verification of Assets and Liabilities 
BankChapter 13 - Property, Plant, and Equipment: Depreciation and Depletion
Chapter 13 Property, Plant, and Equipment: Depreciation and Depletion
True / False Questions
1. The auditors' approach to the audit of property, plant, and equipment largely results from the fact that relatively few transactions occur. True False
2. A major control procedure related to plant and equipment is a budget for depreciation. True False
3. Evidence of continued ownership of property is obtained by vouching payments to a mortgage trustee. True False
4. The auditors typically observe all major items of property, plant, and equipment every year. True False
5. Material purchases of assets from an affiliated company should be disclosed in the financial statements. True False
6. Idle equipment will generally need to be reclassified as a current asset. True False
7. The primary purpose of internal control over plant and equipment is to safeguard the assets from theft. True False
13-1
Chapter 13 - Property, Plant, and Equipment: Depreciation and Depletion
8. A typical procedure in the audit of property is examination of public records to verify the ownership of the property. True False
9. Even when internal control is weak, a significant portion of the audit work on property, plant, and equipment may be performed at an interim date. True False
10. In the audit of depletion the auditors must often rely on the work of specialists. True False
Multiple Choice Questions
11. An auditor has identified numerous debits to accumulated depreciation of equipment. Which of the following is most likely? A. The estimated remaining useful lives of equipment were increased. B. Plant assets were retired during the year. C. The prior year's deprecation expense was erroneously understated. D. Overhead allocations were revised at year-end.
12. In testing for unrecorded retirements of equipment, an auditor might: A. Select items of equipment from the accounting
Chapter 13 Property, Plant, and Equipment: Depreciation and Depletion
True / False Questions
1. The auditors' approach to the audit of property, plant, and equipment largely results from the fact that relatively few transactions occur. True False
2. A major control procedure related to plant and equipment is a budget for depreciation. True False
3. Evidence of continued ownership of property is obtained by vouching payments to a mortgage trustee. True False
4. The auditors typically observe all major items of property, plant, and equipment every year. True False
5. Material purchases of assets from an affiliated company should be disclosed in the financial statements. True False
6. Idle equipment will generally need to be reclassified as a current asset. True False
7. The primary purpose of internal control over plant and equipment is to safeguard the assets from theft. True False
13-1
Chapter 13 - Property, Plant, and Equipment: Depreciation and Depletion
8. A typical procedure in the audit of property is examination of public records to verify the ownership of the property. True False
9. Even when internal control is weak, a significant portion of the audit work on property, plant, and equipment may be performed at an interim date. True False
10. In the audit of depletion the auditors must often rely on the work of specialists. True False
Multiple Choice Questions
11. An auditor has identified numerous debits to accumulated depreciation of equipment. Which of the following is most likely? A. The estimated remaining useful lives of equipment were increased. B. Plant assets were retired during the year. C. The prior year's deprecation expense was erroneously understated. D. Overhead allocations were revised at year-end.
12. In testing for unrecorded retirements of equipment, an auditor might: A. Select items of equipment from the accounting