When a Question Arises About an Entity's Continued Existence, the Auditor

question 17

Multiple Choice

When a question arises about an entity's continued existence, the auditor should consider factors tending to mitigate the significance of negative information concerning the entity's means for maintaining adequate cash flow. An example of such a factor is the:

• A)possibility of purchasing certain assets rather than leasing them.
• B)capability of extending the due dates of existing debt.
• C)appropriateness of changing depreciation methods from double declining balance to straight line.
• D)marketability of property and equipment that management plans to keep.

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Definitions:

Reactants

Substances initially present in a chemical reaction that are consumed to form products during the reaction.

Ethyl Magnesium Chloride

A Grignard reagent represented as CH3CH2MgCl, utilized in organic synthesis to form carbon-carbon bonds.

Pent-1-yne

An alkyne with the chemical formula C5H8, characterized by a triple bond between the first and second carbon atoms in the five-carbon chain.

Transformation

A thorough or dramatic change in form or appearance, often used in the context of chemical reactions.