Which of the Following Is Correct Concerning a CPA Firm's

question 15

Multiple Choice

Which of the following is correct concerning a CPA firm's preparation of financial statements engagement?

• A)The statements must only be used by management and not third parties.
• B)A written engagement letter or oral agreement is required.
• C)No accountant's report ordinarily accompanies the financial statements.
• D)At a minimum,the accountant preparing the financial statements must comply with the compilation standards.

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Definitions:

Charitable Contribution

A donation or gift to a non-profit organization or charity that is often tax deductible for the donor.

Net Income

The amount of money left after all expenses, taxes, and deductions have been subtracted from a company's total revenue.

Separately Stated Items

Items on a partnership or S corporation tax return that are passed through to the owners or shareholders separately from ordinary income.

Schedule K-1

A financial form that details the earnings, deficits, and dividend distributions for partners or shareholders of a partnership or S corporation.