Question

True/False

The purchase of capital assets should be consistent with the authorization table used by the entity to approve such transactions. However, no such table is normally used for lease transactions.

Answer 1

The provided statement is false because both the purchase of capital assets and lease transactions typically follow authorization procedures set by an entity to ensure proper approvals.

Step-by-step explanation:

The statement is false. The purchase of capital assets should indeed be consistent with the authorization table used by the entity to approve such transactions, as this helps ensure that the acquisition is within the entity's policies and budget constraints. However, it is also common for lease transactions to be governed by similar authorization procedures. Authorization tables or approval matrices are used to delineate the levels of authority necessary for various transaction amounts, ensuring that large expenditures or commitments, such as leases, are reviewed and approved by appropriate personnel within the organization.