What are possible plans that management of a troubled business might create to mitigate substantial doubt that the entity will fail to make its debt payments within one year from the issuance of financial statements?
Q: Choose the correct. A company’s management has uncovered events that indicate that substantial doubt…
A: Financial statements: Financial statements are condensed summary of transactions communicated in the…
Q: To which customer is the auditor least likely to send a receivables confirn O customer whose account…
A: A confirmation is sent by auditor to verify whether actual balances match with the books or not.
Q: Lenexa State Bank has followed the practice of capitalizing certain marketing costs and amortizing…
A: Here Is The Answer:
Q: After dissolution caused by the illegal acts, fraud, corruption and etc. of the directors, trustees,…
A: Dissolution of a company is known as the process were the existing company is shut down by force of…
Q: If a client fails to present to the external auditor a concrete plan or sufficient supporting…
A: The correct option is: Option B (S2 and S3 are true)
Q: Define each when dealing with financial responsibility: Accounting and financial reporting matters…
A: Financial Responsibility:-It is the responsibility of one to manage the money so that it will be in…
Q: Business damages, as a result of financial fraud, directly impact the operations of any company.…
A: Fraud is an intentional act which is committed in order to defraud a group of people for the purpose…
Q: As a result of the recent mortgage crisis, many banks reported record losses to their mortgage…
A: 1.
Q: Which of the following statements is incorrect? A bank providing a loan to the entity is not a…
A: D) An entity needs to disclose if it has a common director with another entity because there might…
Q: A company is required to report a liability on its balance sheet when it expects to lose a lawsuit…
A: The accounting principal of conservatism states that all losses should be recorded but uncertain…
Q: Which of the following controls will most likely justify a reduced assessed level ofcontrol risk for…
A: Given: The justification of the reduced assessed level of the risks of control using the control…
Q: Which of the following losses can be considered as operational risk losses? a) A counterparty going…
A: Operational risk is defined by the Bank for International Settlements (BIS) as the risk of loss…
Q: disclose its contingent liabilities
A: Contingent liabilities are obligations not yet accrued yet. But, they may accrue upon the happening…
Q: Assume in the DigitPrint case that the venture capitalists do not provide additional financing to…
A: The stakeholders in the given case are employees of the company, banks, suppliers, and customers.
Q: ABC Company filed a bankruptcy this month because of the impact of fraudulent act committed by its…
A: Bankruptcy is considered a situation where a person or business is unable to pay its debts. Through…
Q: Dell recorded the exclusivity payments as an offset or reduction to its operating expenses. What…
A: Management assertions: The implicit or explicit assertions of the person in charge of compiling the…
Q: In corporate liquidation of a closed bank, which of the following unsecured credits is classified as…
A: Liquidation refers to the winding up of business entity by realizing all the assets and pay off the…
Q: Which of the following audit procedures is least effective for detecting unrecorded long-term debt…
A: Lets understand the basics. Management needs to perform an audit procedure in order to express an…
Q: Geddes Ltd. Is not able to pay its debts when required, but it wants to prevent bankruptcy and…
A: Disclaimer: There are three questions, but we are allowed to answer only one question at a time. So,…
Q: Business damages, as a result of financial fraud, directly impact the operations of any company.…
A: Fraud includes activities such as theft, corruption, conspiracy, bribery etc. Fraud can occur in any…
Q: Changing the aging account receivable to a fixed rate at the end of the fiscal year looks good for…
A: Audit refers to the examination of the financial statements of an entity in order to express a…
Q: The auditor has determined that there is a material going concern uncertainty at the company due to…
A: The answer is option (b) Adverse opinion refer step 2 for explanation
Q: Sell-Soft is the defendant in numerous lawsuits claiming unfair trade practices. Sell- Soft has…
A:
Q: Which of the following are audit evidences? a) Inspecting non-current/fixed assets b) An item of…
A: Audit Evidence: It refers to the information that the auditor uses in arriving at a conclusion on…
Q: properly defaults and is under liquidation, can the creditors of the bank touch and receive the…
A: Answer: Concept: When the liquidation occurs in bank, there is preferential payment that are to be…
Q: A company’s management believes that substantial doubt exists that the company can meet its…
A: Definition: Financial statements: Financial statements are condensed summary of transactions…
Q: In corporate liquidation of a closed bank, which of the following unsecured credits is classified as…
A: Liquidation refers to the winding up of business entity by realizing all the assets and pay off the…
Q: Part A In an article published in The Australian on 4 May 2021, it was noted that the company named…
A: Solution Concept Going concern Going concern is the fundamental assumption used in…
Q: A first-year accounting student is confused by a statement made in a recent class. Her instructor…
A: Current assets: The assets which could be converted into cash within one year like accounts…
Q: Which one is not the fraudulent financial reporting? Select one: a. Cash shortage b. Lack of working…
A: Fraudulent financial reporting : The fraud practices which hinders the objective of…
Q: IDENTIFY THE EFFECT OF THE FOLLOWING TRANSACTION TO THE RISK OF MATERIAL MISSTATEMENT TO FINANCIAL…
A: Internal audit can be done by internal employee of the company and is done on the requirement of…
Q: An analyst assessed a company and determined the company reported a "high quality of earnings." This…
A: Introduction: Income statement: All revenues and expenses are to be shown in Income statement. It…
Q: Refer to the Focus on Fraud feature Common Types of Earnings Management Techniques Involving…
A: Earning Management Techniques This technique is used the company to improve the quality of the…
Q: A certain contingent liability was evaluated at year-end, and considered to have a reasonable…
A: Contingent liabilities are the liabilities that may or may not be happened in the future and it…
Q: f In addition to the risk factor identified in the preceding question, another risk factor relating…
A: The question is based on the concept of Financial Accounting.
Q: List the reporting actions that accountants should consider before a troubled company declares…
A: Bankruptcy is a term used I law for a person or an organization that is not in a position to pay its…
Q: Which of the following situations would raise an auditor's concern about the risk of fraudulent…
A: SOLUTION- Fraudulent financial reporting is the intentional misrepresentation of a firm's financial…
Q: loans made by top management were unwise and have seriously endangered the future of the bank.
A: First option is wrong because the accounting entity assumption considers the business as a separate…
Q: Which of the following finance options is given to businesses by their suppliers? O Commercial Paper…
A: Ques1 : Trade Credit Trade credit is a business-to-business (B2B) agreement in which a customer can…
Q: Which of the provisions of Sarbanes Oxley Act of 2002 (SOX) increased the chances that the financial…
A: Sarbanes Oxley Act of 2002 impose strict penalties in case of violation or fraudulent reporting. Any…
Q: Going Concern
A: Which of the following statements is (are) true, concerning the Going Concern assumption? Correct…
Q: A company’s management has uncovered events that indicate that substantial doubt exists that the…
A: Definition: Financial statements: Financial statements are condensed summary of transactions…
Q: Which of the following are audit procedures? a) Inspecting non-current/fixed assets b) An item of…
A: The following are the audit procedures Inspecting non-current/fixed assets An item of…
Q: Under which of the following circumstances would a disclaimer of opinion not beappropriate?(1) The…
A: From the various given statements we have to find out the circumstances where a disclaimer of…
Step by step
Solved in 2 steps
- Which of the following is a valid assumption from an accounting perspective? O A company that has declared bankruptcy is referred to as a going concern. O Financial statements should be prepared on a calendar-year basis. O Financial statements are prepared for a specific entity that is distinct from the entity's owners. O The results of customer satisfaction surveys should be reported in the financial statements because such results could impact decisions of financial statement users.Match the following terms or phrases in (a–g) with the explanations in 1–8. Terms or phrases may be used more than once. Question 11 options: Current assets/Current liabilities Probable likelihood and estimable liability Measures the “instant” debt-paying ability of a company Current assets – Current liabilities (Cash + Temporary investments + Accounts receivable)/Current liabilities Cash + Temporary investments + Accounts receivable Probable likelihood of a liability but cannot be estimated Remote contingent liability Reasonably possible likelihood of a liability 1. Current ratio 2. Working capital 3. Quick assets 4. Quick ratio 5. Record an accrual and disclose in the notes to the financial statements 6. Disclose only in notes to financial statements 7. No disclosure needed in notes to financial statements15 Why does a business maintain a provision for doubtful debts account? to apply the accounting principle of prudence to avoid profit for the year being understated to have an accurate forecast of debts which will be uncollectible to reduce the expense of irecoverable debts in the future 16How should ioventory he valued2
- Which of the following concepts states that a business will continue its operations for the foreseeable future and the company will not be forced to liquidate in the near future? a. Accrual basis b. Materiality c. Consistency concept d. Going concernFinancial accounting information ________.A. should be incomplete in order to confuse competitorsB. should be prepared differently by each companyC. provides investors guarantees about the futureD. summarizes what has already occurreduse legal basis in answering 1. If your company would suffer financial liquidity problems but is not yet insolvent, although the management foresees its inability to pay its obligations as they fall due, what do you propose to be done, and how it would be done? In outline form, please provide the steps/procedures to be undertaken. 2. In case your company is insolvent, can the - (1) individual stockholders, (2) creditors, or (3) any officer of the company- file an insolvency petition? 3. Assuming that there are pending suits against your company, what would be the effect of filing an insolvency proceeding on such pending suits?
- bad debt expense is relevant into the followings cycles: a. capital acquisition and payments b. Inventory and warehousing c. payroll and personnel d. sales and collection أخلِ اختياري سؤال 2 غير مجاب عليه بعد الدرجة من 1.00 علِّم هذا السؤال نص السؤال CPA Ellen Stout performs the audit of the local symphony society. Because of her good work, she was elected an honorary member of the board of directors. This action does not violate the independency of the auditor إختر واحداً: صح خطأ سؤال 3 غير مجاب عليه بعد الدرجة من 1.00 علِّم هذا السؤال نص السؤال The two characteristics of the appropriateness of evidence are a. relevance and reliability. b. relevance and timeliness. c. relevance and accuracy. d. reliability and accuracy.12-Which of the following concept states that a business will continue its operations for the foreseeable future and the company will not be forced to liquidate in near future. a. Accrual basis b. Materiality c. Going concern d. Consistency conceptQuestion 2 In each case state which concept or concepts are relevant to the situation given. a. Subtracting an amount paid for insurance because it belongs to the next year. b. Maintain the same percentage rate of the provision for doubtful debts despite it not being always accurate in predicting future bade debts c. Valuing inventory at likely selling price for a successful business d. Valuing a non-current asset at its likely market value.
- Choose the correct. A company’s management has uncovered events that indicate that substantial doubt exists that the company can pay its debts as they come due over the following year. What should management do next?a. Management should disclose that substantial doubt exists that the company can remain in existence.b. Management should examine the plans created to address the concern.c. Management should adjust all asset balances to fair value.d. Management should adjust all liabilities to expected settlement amounts.Which of the following would result in the RETURN OF ASSETS for an accounting entity deteriorating. Answer Can be all of them, none of them or any combination of them. 1. Accrued interest revenue is adjusted 2. Share market price of the entity's shares increases 3. Cash receipt from a customer for amounts owing which was previously sold on creditWhich of the following terms defines the underlying assumption of Going Concerns? A The company is expected to continue to operate indefinitely as a financially viable enterprise. The company expected to continue until it is evidence that bankruptcy or liquidation is likely When accountants prepare financial statements they do so with the underlying assumption that the company is a going concern. D All of statements are correct for going concern assumption