If a Client Expensed the Acquisition Cost of Some Assets

question 30

Multiple Choice

If a client expensed the acquisition cost of some assets that should have been capitalized and depreciated over their useful lives,which of the following would be incorrect?

• A)A qualified opinion would be appropriate.
• B)The opinion paragraph should be modified to include language such as: "except for the effects of not capitalizing the acquisition costs of some assets..."
• C)An explanatory paragraph should include the effects of the subject matter of the qualification,where practicable.
• D)An explanatory paragraph should be modified to include language such as: "subject to the qualified act..."

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Definitions:

Specialization of Labor

The division of labor into distinct tasks, where individuals specialize in specific tasks, improving efficiency and productivity.

Adam Smith

An 18th-century economist known for his writings on classical economics, including the concept of the division of labor and the benefits of free markets.

Absolute Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than competitors using the same amount of resources.

Comparative Advantage

An economic theory that suggests a country should produce and export goods in which it has a lower opportunity cost than other countries.