Preparing Financial Statements for an Unincorporated Business on a Basis

question 11

Multiple Choice

Preparing financial statements for an unincorporated business on a basis that does not comply with GAAP usually will result in:

• A) A CPA being suspended from membership in the AICPA
• B) A professional accountant suffering adverse professional consequences if the accountant practices in a country that has adopted IFRS
• C) A CPA being permanently disqualified from continuing membership in the AICPA
• D) No professional discipline as long as the noncompliance with GAAP is adequately disclosed

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Definitions:

Inputs That Substitute

Resources or factors of production that can be used in place of one another in the manufacturing process.

Units Of Input

The quantities of labor, capital, materials, and other resources used in the production of goods or services.

Units Of Outputs

The individual items or quantities of service produced by an economic entity.

Cost Of Capital

The cost of funds used for financing a business, expressed as the rate of return that investors expect from the capital invested in the business.