If a Misstatement Is Immaterial Relative to the Financial Statements

question 43

Multiple Choice

If a misstatement is immaterial relative to the financial statements of the entity for the current period and is not expected to have a material effect in future periods, it is appropriate to issue

• A) an unqualified opinion.
• B) a qualified opinion.
• C) an adverse opinion.
• D) a disclaimer of opinion.

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Definitions:

Straight-Line Method

A way of calculating depreciation by evenly spreading the cost of an asset over its useful life.

Resale Value

The projected value at which an asset can be disposed of after its life of usability has ended.

Office Furniture

Items and fixtures used in an office setting to support various work activities and tasks, such as desks, chairs, and file cabinets.

Resale Value

The estimated market value of an asset if sold again in the future, often considered for vehicles, electronics, and properties.