In Addition to the Preparation of Financial Statements, It Is

question 11

Multiple Choice

In addition to the preparation of financial statements, it is also the responsibility of those charged with governance to

• A) identify the financial reporting framework to be used in the preparation and presentation of their financial statements.
• B) establish and maintain internal controls that are effective in preventing and detecting material misstatements.
• C) selecting and applying appropriate accounting policies and making reasonable accounting estimates.
• D) all of the above

Apply incremental analysis in decisions involving alternative courses of action.

Assess the financial performance of divisions within a company and the impact of discontinuing operations.

Discuss the role of management accounting in decision-making and strategic planning.

Identify the qualitative and quantitative factors involved in make-or-buy decisions.

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Definitions:

Single-Step Income Statement

An income statement format that lists all revenues and then deducts all expenses to find the net income with only one subtraction.

Multiple-Step Income Statement

A detailed income statement that separates operational revenue and expenses from non-operational ones, presenting a clear view of a company’s operational efficiency.

Income Statements

A financial statement that shows a company’s revenues, expenses, and profits or losses over a specific period.

Wholesalers

Businesses that buy goods in bulk from manufacturers or distributors and then sell them in smaller quantities to retailers or other businesses.