Which of the Following Factors Is Not Relevant When Management

question 55

Multiple Choice

Which of the following factors is not relevant when management is assessing the going concern assumption?

• A) whether the auditor specializes in the client's industry
• B) the time into the future that an event is likely to take place
• C) the nature and condition of the entity's business
• D) the size and complexity of the entity

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Definitions:

Manufacturing Overhead

All manufacturing costs other than direct materials and direct labor, including expenses like rent, utilities, and equipment depreciation.

Raw Materials

The basic materials from which products are manufactured or made, typically unprocessed or only minimally processed.

Purchase of Raw Materials

The cost incurred by a company to acquire the basic materials necessary for production.

Overapplied Manufacturing Overhead

Occurs when the manufacturing overhead allocated to products is more than the actual manufacturing overhead costs incurred.