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Showing posts with label entity. Show all posts
Showing posts with label entity. Show all posts

Thursday, January 14, 2016

If a misstatement is immaterial to the financial statements of the entity for the current period, but is expected to have a material effect in future periods

AUDITING MULTIPLE CHOICE

1. (TCO 2) If a misstatement is immaterial to the financial statements of the entity for the current period, but is expected to have a material effect in future periods, it is appropriate to issue a(n): (Points: 2)

2. (TCO 2) When a client has not applied GAAP consistently from the prior year to the current year, the auditor does not concur with the appropriateness of the change, and the change in GAAP has a material effect on the financial statements, the auditor should issue a(n): (Points: 2)

3. (TCO 2) Which of the following is not an essential condition for issuing the standard unqualified audit opinion? (Points: 2)

4. (TCO 2) An adverse opinion is issued when the auditor believes: (Points: 2)

5. (TCO 11) A principal purpose of a letter of representation from management is to (Points: 2)

6. (TCO 11) A client representation letter is: (Points: 2)

7. (TCO 11) Inquiries of management regarding the possibility of unrecorded contingencies will not be useful in uncovering: (Points: 2)

8. (TCO 11) The audit step most likely to reveal the existence of contingent liabilities is (Points: 2)

9. (TCO 2) The standards which govern the CPA’s association with unaudited financial statements are: (Points: 2)

10. (TCO 2) A CPA firm can issue a compilation report: (Points: 2)

Click here for the solution: If a misstatement is immaterial to the financial statements of the entity for the current period, but is expected to have a material effect in future periods

Sunday, July 12, 2015

Ben and Jerry organize their new entity as an LLC on May 16th of the year 1

Problem 2-1 Ben and Jerry organize their new entity as an LLC on May 16th of the year 1. What is the default tax classification for this entity? Are there any alternative classification(s) available? If so, how do Ben and Jerry elect one of these alternate classification(s) and what are the tax consequences of doing so?

Click here for the solution: Ben and Jerry organize their new entity as an LLC on May 16th of the year 1