Prior to Commencing the Compilation of Financial Statements of a Nonpublic

question 29

Multiple Choice

Prior to commencing the compilation of financial statements of a nonpublic entity, the accountant should

• A) Perform analytical procedures sufficient to determine whether fluctuations among account balances appear reasonable.
• B) Complete the preliminary phase of the study and evaluation of the entity's internal control.
• C) Verify that the financial information supplied by the entity agrees with the books of original entry and supporting documentation.
• D) Acquire a knowledge of any specialized accounting principles and practices used in the entity's industry.

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Definitions:

Price Elastic

A measure of how much the quantity demanded of a good responds to a change in the price of that good. It indicates the sensitivity of consumers to price changes.

Total Revenue

The total income received by a firm from the sale of its products or services before any expenses are deducted.

Total Revenue

The overall revenue a business earns from sales of goods or provision of services throughout a given timeframe.

Price Falls

Occurs when the market price of a good or service decreases over time.