When a Financial Forecast Fails to Disclose a Significant Assumption

question 4

Multiple Choice

When a financial forecast fails to disclose a significant assumption used to prepare that forecast, which of the following reports become appropriate? $$\begin{array} { | c | c | c | } \hline & \text { Qualified } & \text { Adrerse } \\\hline \text { A. } & \text { Yes } & \text { Yes } \\\hline \text { B. } & \text { Yes } & \text { No } \\\hline \text { C. } & \text { No } & \text { Yes } \\\hline \text { D. } & \text { No } & \text { No } \\\hline\end{array}$$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Relevant Range

The span of activity or volume where the specific assumptions of cost behavior are considered valid.

Break-even Point

The level of production or sales at which total revenues equal total costs, resulting in neither profit nor loss.

Second Marriage

A second marriage refers to the act of getting married again after a previous marriage has ended, either through divorce or the death of a spouse.

Divorced Adults

Divorced adults are individuals who have legally dissolved their marriage, requiring adjustment to changes in family dynamics, living arrangements, and lifestyle.