What Is an Audit Opinion

question 90

Multiple Choice

What is an audit opinion?

• A)Prepared by management, this is a written evaluation of the quality of work done by the independent accountants.
• B)Prepared by the independent accountants, this is a written evaluation of the company's financial statements.
• C)Prepared by management, this is a written evaluation of the quality of work done by the internal accountants.
• D)Prepared by the independent accountants, this is a written evaluation of the goods or services offered for sale by the company.

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Definitions:

Contribution Margin Ratio

A financial metric that measures the proportion of sales revenue that exceeds variable costs, indicating how much revenue contributes to fixed costs and profit.

Variable Costs

Costs that vary in direct proportion to changes in levels of an activity or production volume.

Fixed Costs

These are expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Net Income

The total earnings of a company after subtracting all of its expenses, including taxes and operating expenses, from its total revenues.