If Audited Financial Statements Include a Balance Sheet and an Income

question 24

Multiple Choice

If audited financial statements include a balance sheet and an income statement,but do not include a statement of cash flows:

• A)The auditors may still issue an unmodified opinion.
• B)The auditors should issue a qualified report for the departure from generally accepted accounting principles.
• C)The auditors should issue a qualified report indicating a scope limitation in that no statement of cash flows is presented.
• D)The auditors should disclaim an opinion on the overall financial statements.

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Definitions:

Cost of Goods Manufactured

Cost of Goods Manufactured (COGM) is the total production cost of goods completed during a specific period, including materials, labor, and overhead costs.

Schedule of Cost

A detailed listing of costs incurred for a project or production, often categorized by type or department.

Operations Data

Information related to the day-to-day activities of a business, including production, sales, and logistics metrics.

Overapplied Overhead

Happens when the overhead assigned to products exceeds the actual overhead costs incurred, resulting in excess allocation that needs adjustment in accounting records.