Question

Explain the relationship between substantive tests of transactions for the acquisition and payment cycle and tests of details of balances for the verification of​ property, plant, and equipment. Which aspects of​ property, plant, and equipment are directly affected by the tests of controls and substantive tests of transactions and which are​ not?

Answer 1

The correct answer is PPE acquisitions for the current period have already been partially verified.

Step-by-step explanation:

The source of the debits in the asset account is the acquisition journal: PPE acquisitions for the current period have already been partially verified as part of the acquisition and payment cycle .

The occurrence, integrity, accuracy, cut and classification of PPE acquisitions would have been examined: asset disposal, depreciation are not proven as part of the acquisition and payment cycle

PPE: only look for changes from year to year

Inventory: should not be maintained for more than 1 year