The Adverse Effects of Events Causing an Auditor to Believe

question 60

Multiple Choice

The adverse effects of events causing an auditor to believe there is substantial doubt about an entity's ability to continue as a going concern would most likely be mitigated by evidence relating to the

• A) Ability to expand operations into new product lines in the future.
• B) Feasibility of plans to purchase leased equipment at less than market value.
• C) Marketability of assets that management plans to sell.
• D) Committed arrangements to convert preferred stock to long-term debt.

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Definitions:

National Debt

The total amount of money that a country's government has borrowed.

Automatic Stabilizers

Economic policies and programs, such as unemployment insurance and taxation, that automatically adjust to help stabilize an economy during fluctuations.

Federal Budget Deficits

Occurs when a government's total expenditures exceed the revenue that it generates, excluding money from borrowings.

Aggregate Demand

The overall requirement for goods and services across an economy, evaluated at one price level and over a specified duration.