A Material Misstatement in the Financial Statements,including Those Requiring Restatements

question 96

Multiple Choice

A material misstatement in the financial statements,including those requiring restatements strongly implies a material weakness in which of the following?

• A)income statement.
• B)balance sheet.
• C)internal control.
• D)cash flow statements.

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Definitions:

Financial Leverage

Financial leverage refers to the use of borrowed money (debt) to finance the acquisition of assets, with the expectation that the income or capital gain from the assets will exceed the cost of borrowing.