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

question 87

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:

Overpopulation

Overpopulation is a condition where an organism's numbers exceed the carrying capacity of its habitat, leading to environmental degradation and diminished quality of life.

Territoriality

The tendency to stake out an area and a willingness to defend that area from intruders.

Individual Good-Collective

The concept that individual welfare or happiness contributes to the overall good or welfare of the community or society.

Water Shortage

A situation in which the available water supply is insufficient to meet the needs of the population, often leading to serious environmental and social consequences.