Jones Retailing, a Nonpublic Entity, Has Asked Winters, CPA, to Compile

question 42

Multiple Choice

Jones Retailing, a nonpublic entity, has asked Winters, CPA, to compile financial statements that omit substantially all disclosures required by generally accepted accounting principles. Winters may compile such financial statements, provided the:

• A)reason for omitting the disclosures is explained in the engagement letter and acknowledged in the management representation letter.
• B)financial statements are prepared on a comprehensive basis of accounting other than generally accepted accounting principles.
• C)distribution of the financial statements is restricted to internal use only.
• D)omission is not undertaken to mislead the users of the financial statements and is properly disclosed in the accountant's report.

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Definitions:

Domestic Production

The manufacture of goods within a country’s borders as opposed to importing goods from other countries.

Domestic Price

The price of goods or services within a country's borders, differing from global or international prices due to factors like tariffs, taxes, and demand-supply dynamics in the local market.

Free Trade

An economic policy that allows imports and exports between countries with minimal or no barriers to trade.

Domestic Consumption

The total demand for goods and services within a country, excluding those goods and services that are exported.