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NEW QUESTION: 1
An auditor analyzes repairs and maintenance accounts primarily to obtain evidence in support of the audit
assertion that all:
A. Noncapitalizable expenditures for repairs and maintenance have been recorded in the proper period.
B. Noncapitalizable expenditures for repairs and maintenance have been properly charged to expense.
C. Expenditures for property and equipment have not been charged to expense.
D. Expenditures for property and equipment have been recorded in the proper period.
Choice "D" is correct. Analysis of repairs and maintenance expense provides assurance with regard to
management's assertion that expenditures for property and equipment have been capitalized and have not
been charged to expense.
Choice "A" is incorrect. Analysis of repairs and maintenance accounts provides limited evidence about the
appropriate cutoff of transactions for the period.
Choice "B" is incorrect. Analysis of repairs and maintenance accounts does not provide evidence about
the appropriate cutoff of expenditures for property and equipment.
Choice "C" is incorrect. Analysis of capitalized expenditures might help identify noncapitalizable
expenditures, which were capitalized erroneously.
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