Tech Company Has Disclosed an Uncertainty Due to Pending Litigation

question 841

Multiple Choice

Tech Company has disclosed an uncertainty due to pending litigation. The auditor's decision to issue a qualified opinion rather than an unqualified opinion most likely would be determined by the:

• A) Lack of sufficient evidence.
• B) Inability to estimate the amount of loss.
• C) Entity's lack of experience with such litigation.
• D) Lack of insurance coverage for possible losses from such litigation.

---

Definitions:

Freight-Absorption Pricing

A pricing strategy where the seller absorbs all or part of the freight charges to make their product more attractive to distant buyers.

FOB Absorption Pricing

A pricing strategy where the seller absorbs all or part of the freight charges to deliver goods, making the price including transportation costs.

Basing-Point Pricing

Selecting one or more geographical locations (basing point) from which the list price for products plus freight expenses are charged to the buyer.

Uniform Delivered Pricing

A pricing strategy where a company charges the same shipping price to all customers, regardless of their geographic location.