On 2 July 20X0 Pretty Paint Ltd Received a Notice

question 50

Multiple Choice

On 2 July 20X0 Pretty Paint Ltd received a notice from its primary suppliers that all wholesale prices would be increased by 10%, to be effective immediately. On the basis of the notice Pretty Paint Ltd revalued its 30 June 20X0
Inventory to reflect the higher costs. The details of the adjustment were disclosed in the notes to the financial report.The inventory adjustment was material. The auditor of the 30 June 20X0 financial report would issue:

• A) an unmodified opinion with an Emphasis of Matter of disclosure.
• B) a disclaimer of opinion.
• C) a qualified opinion.
• D) an unmodified opinion.

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Definitions:

Complementary Inputs

Inputs used in production that are used together with other inputs to increase output, for instance, coffee and milk in a café.

MP Schedule

A management plan or timetable for the production or operations within a company, often detailing when tasks should be completed.

Marginal Product

The increase in output resulting from a one-unit increase in the amount of a single input, holding all other inputs constant.

Capital For Labor

The process of investing in capital goods to increase productivity, often leading to the replacement of labor with technology.