A Client's Previous Two Years of Financial Statements Understated Estimated

question 61

Multiple Choice

A client's previous two years of financial statements understated estimated warranty payable by $30,000 and $50,000 respectively,both immaterial amounts.This year,the auditors estimate that the accrual is understated by an additional $60,000.In this year's audit,$100,000 represents a material amount.Assuming that the entire understatement is to be recorded,the decrease in this year's income due to these understatements is:

• A)$0.
• B)$60,000.
• C)$110,000.
• D)$140,000.

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Definitions:

Frequent Headaches

Repeated occurrences of head pain, which can be a symptom of various medical conditions or stress.

Skin Conditions

Refers to any disorder or disease that affects the skin, including rashes, dermatitis, acne, and psoriasis.

Task Demand Stressor

Describes conditions or aspects of a task that require sustained physical or mental effort, potentially leading to stress.

Quantitative

Pertaining to or expressible in terms of quantity, often involving the use of statistical methods to collect and analyze numerical data.