The Standard Report Issued by an Accountant After Reviewing the Financial

question 296

Multiple Choice

The standard report issued by an accountant after reviewing the financial statements of a nonissuer states that:

• A) A review includes assessing the accounting principles used and significant estimates made by management.
• B) A review includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
• C) The accountant is not aware of any material modifications that should be made to the financial statements.
• D) The accountant does not express an opinion or any other form of assurance on the financial statements.

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Definitions:

Depreciation Cost

The systematic allocation of an asset's cost over its useful life to reflect the loss in value over time.

Plant Asset

Long-term tangible assets that are used in the production of goods and services, including machinery, buildings, and equipment.

Depreciable Cost

The total amount that can be depreciated over the life of an asset, typically the asset's cost minus its salvage value.

Salvage Value

The foreseen redemption value of an asset after its period of usability concludes.