Correct Answer: D

Explanation: In some cases, the corroborating information that can be obtained by the application of auditing procedures other than inquiry is limited. When a client plans to discontinue a line of business, for example, the auditor may not be able to obtain information through other auditing procedures to corroborate the plan or intent. Accordingly, the auditor should obtain a written representation to provide confirmation of management's intent. The client's plans included in the other answers, in comparison to the plans to discontinue a line of business, could be more readily corroborated by other evidence.

Today’s question: REG

The Simone Trust reported distributable net income of $120,000 for the current year. The trustee is required to distribute $60,000 to Kent and $90,000 to Lind each year. If the trustee distributes these amounts, what amount is includible in Lind's gross income?

A)   $0

B)   $60,000

C)   $72,000

D)   $90,000

Today’s question: FAR

The basis for classifying assets as current or noncurrent is the period of time normally elapsed from the time the accounting entity expends cash to the time it converts:

A)   Inventory back into cash, or 12 months, whichever is shorter

B)   Receivables back into cash, or 12 months, whichever is longer

C)   Tangible fixed assets back into cash, or 12 months, whichever is longer

D)   Inventory back into cash, or 12 months, whichever is longer