Which of the Following Would an Accountant Not Need to Know

question 15

Multiple Choice

Which of the following would an accountant not need to know when conducting a compilation?

• A)The accounting principles and practices of the industry in which the entity operates.
• B)A general understanding of the nature of the entity's business transactions and the form of its accounting records.
• C)The accounting basis on which the financial statements are to be presented.
• D)The accountant would need to know all of the other items listed when conducting a compilation.

---

Definitions:

Useful Life

The estimated period over which a fixed asset is expected to be usable by the organization, impacting its depreciation calculation.

Operating Costs

The ongoing expenses related to running a business, excluding the cost of goods sold, such as rent, utilities, and payroll.

Service Hours

The total hours spent by an organization or employee providing services to clients or working on service-related tasks.

Economic Value

The value of an asset deriving from its ability to generate income or its potential use in producing goods and services.