Choose the letter that corresponds to the answer. In the process of applying the entity's accountingpolicies, management makes various judgments,'apart from those involving estimations, that canşignificantly affect the amounts it recognizes in the1. Statement l:financial statements.Statement 2: An accounting policy may be significant because ofthe nature of the entity's operation even if amountsfor current and prior periods are not material.a. Only the first statement is correct.b. Only the second statement is correct.С.Both statements are correct.d. Neither of the statements is correct.In making a disclosure, the entity is required to disclosebudget information or forecast to disclose in order to2. Statement 1:help users of financial statements understand aboutthe future and other sources of estimation.When an entity has significant foreign operations ortransactions in foreign currencies, users would expectStatement 2:disclosure of accounting policies for the recognition offoreign exchange gains and losses.а.Only the first statement is correct,b. Only the second statement is correct.С.Both statements are correct.d. Neither of the statements is correct.

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In the process of applying the entity's accounting policies, management makes various judgments,' apart from those involving estimations, that can şignificantly affect the amounts it recognizes in the financial statements. Statement 1: Statement 2: An accounting policy may be significant because of the nature of the entity's operation even if amounts for current and prior periods are not material,

In the process of applying the entity's accounting policies, management makes various judgments,' apart from those involving estimations, that can şignificantly affect the amounts it recognizes in the financial statements. Statement 1: Statement 2: An accounting policy may be significant because of the nature of the entity's operation even if amounts for current and prior periods are not material,

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter1: Comprehensive Cases

Section1.2: Lehman Brothers Holdings, Inc.

Problem 2Q

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