The Title of a Certain Working Paper Is "Proposed Adjusting

question 29

Multiple Choice

The title of a certain working paper is "Proposed Adjusting Entries." The use of the word "proposed" indicates that:

• A) these are reclassifying entries.
• B) the listed adjustments are not considered necessary.
• C) the auditor should not adjust the accounting records.
• D) the listed adjustments are not considered material.
• E) the client disagrees with the adjustments listed.

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Definitions:

Consolidation Worksheet Entries

Journal entries used in preparing consolidated financial statements, helping to adjust and eliminate internal transactions between parent and subsidiary entities.

Fair Value

An estimate of the price at which an asset or liability could be exchanged in a current transaction between willing parties.

Unamortized Patent

The portion of a patent's cost that has not yet been expensed in the income statement over its useful life.

Amortization Expense

The systematic allocation of the cost of an intangible asset over its useful life.