According to Auditing Standards,financial Statements Presented on a Special Purpose

question 71

Multiple Choice

According to auditing standards,financial statements presented on a special purpose should not

• A) Contain a note describing the special purpose framework.
• B) Describe in general how the special purpose framework differs from generally accepted accounting principles.
• C) Be accompanied by an audit report that gives an unqualified opinion with reference to the special purpose framework.
• D) Contain a note with a quantified dollar reconciliation of the assets based on the special purpose framework with the assets based on generally accepted accounting principles.

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Definitions:

Current Assets

Holdings that are likely to be transformed into cash, merchandised, or expended either within the span of one year or throughout the standard operating period of the enterprise, should that exceed one year.

Accounts Receivables

Money owed to a business by its clients or customers for goods or services that have been delivered but not yet paid for.

Accounts Payable

Liabilities of a company or an organization consisting of money owed to suppliers or creditors for goods and services received that are not yet paid for.

Inventory

Goods or materials that a business holds for the purpose of resale or production.