Which of the following situations has the best chance of being detected when a CPAcompares 2013 revenues and expenses with the prior year and investigates all changesexceeding a fixed percent?(1) An increase in property tax rates has not been recognized in the company’s 2013accrual.(2) The cashier began lapping accounts receivable in 2013.(3) Because of worsening economic conditions, the 2013 provision for uncollectibleaccounts was inadequate.(4) The company changed its capitalization policy for small tools in 2013.
Which of the following situations has the best chance of being detected when a CPAcompares 2013 revenues and expenses with the prior year and investigates all changesexceeding a fixed percent?(1) An increase in property tax rates has not been recognized in the company’s 2013accrual.(2) The cashier began lapping accounts receivable in 2013.(3) Because of worsening economic conditions, the 2013 provision for uncollectibleaccounts was inadequate.(4) The company changed its capitalization policy for small tools in 2013.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following situations has the best chance of being detected when a CPA
compares 2013 revenues and expenses with the prior year and investigates all changes
exceeding a fixed percent?
(1) An increase in property tax rates has not been recognized in the company’s 2013
accrual.
(2) The cashier began lapping
(3) Because of worsening economic conditions, the 2013 provision for uncollectible
accounts was inadequate.
(4) The company changed its capitalization policy for small tools in 2013.
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