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NEW QUESTION: 1
Which of the following is an example of the verification of internal documentary evidence?
A. Reconciling a vendor's month-end statement.
B. Vouching a copy of a sales invoice to receivables.
C. Recalculating a customer's purchase order.
D. Reviewing a carrier's bill of lading.
Answer: B

NEW QUESTION: 2
Because of inexact estimates of the service life and the residual value of a plant asset, a fully depreciated asset was sold in the current year at a material gain. This gain most likely should be reported:
A. As part of sales revenue on the current income statement
B. In the extraordinary item section of the current income statement.
D As an adjustment to prior periods' depreciation on the statement of changes in equity_
C. In the other revenues and gains section of the current income statement
Answer: C
Explanation:
Income includes revenue and gains. Their essential nature is the same, and they are not treated as separate financial statement elements. Revenues occur in the course of ordinary activities. Gains may or may not occur in the course of ordinary activities. For example, gains may occur from the sale of noncurrent assets. Thus, the gain on the sale of a plant asset is not an operating item and should be classified in an income statement with separate operating and non operating sections in the other revenues and gains section.

NEW QUESTION: 3

A. Option D
B. Option E
C. Option F
D. Option A
E. Option C
F. Option B
Answer: A,E