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:

BUN

Blood Urea Nitrogen; a medical test that measures the amount of urea nitrogen found in blood, indicative of kidney function.

Continuous Ambulatory Peritoneal Dialysis

Continuous Ambulatory Peritoneal Dialysis (CAPD) is a form of dialysis that cleanses the body of waste products in people with severe chronic kidney disease, using the lining of the abdomen to filter blood.

Potassium

Potassium is a chemical element with symbol K, vital for cell function and a key electrolyte in the body.

Hydrogen Ion Concentration

A measure of the acidity or alkalinity of a solution based on the concentration of hydrogen ions present, typically expressed as pH.