An Auditor Concludes That There Is Substantial Doubt About an Entity's

question 110

Multiple Choice

An auditor concludes that there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time. The entity's financial statements adequately disclose its financial difficulties. Under these circumstances, the auditor's report is required to include an explanatory paragraph that specifically uses the phrase(s) . $\begin{array}{lcc} & \text {"Except for the Effects}& \text {"Possible Discontinuance of the}\\ & \text {of Such Adjustments"}& \text {Entity's operations"}\\\end{array}$
A. $\begin{array}{lcc} &&&& \text { Yes } &&&&& &&&&&\text { Yes } \\\end{array}$
B. $\begin{array}{lcc} &&&& \text { Yes } &&&&&& &&&& \text { No } \\\end{array}$
C. $\begin{array}{lcc}&&&& \text { No } &&&&&& &&&& \text { Yes } \\\end{array}$
D. $\begin{array}{lcc} &&&& \text { No } &&&&&& &&&& \text { No }\end{array}$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Market System

An economic system where decisions regarding investment, production, and distribution are based on supply and demand, with prices serving as signals to participants.

Circular Flow Diagram

An illustration showing the flow of resources from households to firms and of products from firms to households. These flows are accompanied by reverse flows of money from firms to households and from households to firms.

Revenue

Revenue is the total amount of money received by a company for goods sold or services provided during a certain period of time, before any expenses are deducted.

Expenditures

The total amount of money spent by a household or country on consumption and services.