Which of the Following Is Not a Misstatement of the Financial

question 50

Multiple Choice

Which of the following is not a misstatement of the financial statements?

• A) The client uses different inventory accounting methods for internal and external reporting.
• B) A departure from GAAP.
• C) The footnote for pensions is omitted.
• D) A clerk incorrectly based the allowance for doubtful accounts on 31% of sales as opposed to 13% of sales as determined by the controller.

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Definitions:

Consistent

A property of a set of statements that allows them all to be true at the same time without contradiction.

Contingency

A forthcoming incident or situation which may occur but its certainty cannot be ascertained.

Conditional Statement

A statement in logic that involves an if-then structure, asserting that if one thing is true, then another will follow.

Contradictory

Describing propositions, beliefs, or statements that are mutually opposed or inconsistent, such that if one is true, the other must be false.