A CPA Prepared Financial Statements That Reflect a Company's Expected

question 23

Multiple Choice

A CPA prepared financial statements that reflect a company's expected financial position,operating results,and cash flows and were based on one or more hypothetical assumptions: This CPA has:

• A) Violated the ethical standards of the accounting profession, as reflected in the IFAC Code of Conduct
• B) Violated the ethical standards of the accounting profession, as reflected in both the AICPA's and IFAC's standards of conduct
• C) Prepared financial projections, which is not an ethical violation
• D) Prepared financial forecasts, which is not an ethical violation

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Definitions:

Owner Investments

Owner investments, also known as owner contributions, refer to money or other assets that owners put into their business for its use.

Revenues

The total income generated from normal business operations and other activities before any expenses are subtracted.

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time.

Liabilities

Financial obligations or debts owed by a business to outsiders, such as loans, accounts payable, or bonds.