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3 Cards in this Set
- Front
- Back
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Interpretation of financial statements is required because the accounting treatment of economic events diverges in all of the following dimensions EXCEPT:
A. recognition. B. timing. C. measurement. D. class of users. |
D. class of users.
In preparing financial statements, choices must be made within the limits of GAAP as to what events to recognize (e.g., off-balance-sheet items), the period that they will be reported in (e.g., revenue recognition), and the amount to be reported (e.g., inventory costing method). Financial statements are written for a variety of users but not specifically for one class or another. |
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Information about accounting estimates, assumptions, and methods chosen for reporting is most likely found in:
A. the Management Discussion and Analysis. B. the auditor's opinion. C. the footnotes to the accounting statements. D. supplementary schedules. |
C. the footnotes to the accounting statements.
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If an auditor has reservations about errors or misstatements in a company's financial statements, she will issue a:
A. qualification letter. B. dissenting opinion. C. cautionary note. D. qualified opinion. |
D. qualified opinion.
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