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ACCA Applied Knowledge · Financial Accounting · Tangible non-current assets

Which control is MOST directly designed to detect assets that are recorded in the register but no longer exist?

Periodic physical verification of assets to the register most directly detects recorded assets that no longer exist. Inspecting assets and tracing them to the register reveals missing, scrapped or sold items, while authorisation and classification controls address other risks.

  1. AAuthorisation of capital expenditure by senior management
  2. BPeriodic physical verification of assets to the registerCorrect
  3. CCalculating depreciation using the straight-line method
  4. DSeparating capital and revenue expenditure in the ledger

Explanation

Physically inspecting assets and agreeing them to the register reveals assets that are missing, scrapped or sold but still recorded. Authorisation controls purchases, and the other options concern measurement and classification rather than existence.

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