Which of the Following Statements Regarding Financial Statement Preparation Is

question 63

Multiple Choice

Which of the following statements regarding financial statement preparation is false?

• A)Financial statements can be prepared from information in the adjusted trial balance.
• B)The Sarbanes-Oxley Act requires that financial statements filed with the Securities and Exchange Commission include declarations by the CEO and CFO of the company.
• C)It makes sense to prepare the balance sheet first because it contains information needed on the income statement.
• D)When preparing financial statements an adjusted trial balance is easier to work with than the entire ledger.
• E)The income statement is prepared first.

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Definitions:

Inflation Rate

The increase pace in the cost of living, as reflected in goods and services prices, leading to reduced money value.

Consumer Price Index

A measure assessing the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

GDP Deflator

The GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy, used to convert nominal GDP into real GDP.

Basket of Goods

A basket of goods is a fixed set of consumer products and services valued on a regular basis for calculating inflation or cost of living adjustments.