7.Transactions and events are recognized initially at the exchange price to provide relevant and reliable information.8.An accounting alternative is selected that is least likely to overstate assets and income.9.The process of formally recording and reporting an item in the financial statements of a company.10. The process of measuring and reporting the economic effects of transactions, events, and circumstances in the appropriate periodwhen those effects occur, even though the cash consequences may occur in a different period. The following is a list of accounting assumptions and principles that have had an important impact on the development of generally accepted accounting principles and statements describing certain accounting practices.A. Reporting entityB. Going concernC. Period of timeD. Historical costE. Monetary unitF. RecognitionG. Accrual accountingH. Revenue recognitionI. Expense recognitionJ. ConservatismRequired:Select the accounting assumption or principle that justifies each accounting practice and select the appropriate letter on each statement.1.To provide timely information, companies prepare and report financial statements at the end of each year.2.Appropriate recognition when a company consumes economic resources in conducting business operations.3.Accounting measurements for U.S. companies are reported in dollars.4.The financial statements represent the business, rather than its owners.5.In the absence of evidence to the contrary, the business can be reasonably expected to operate long enough to carry out itsexisting commitments.6.Appropriate recognition when a company creates economic benefits (inflows of assets or settlements of obligations) by providinggoods or services to customers.1111

Accounting Principles: These refer to the rules and guidelines which companies need to follow while…

Transactions and events are recognized initially at the exchange price to provide relevant and reliable information. . An accounting alternative is selected that is least likely to overstate assets and income. 9. The process of formally recording and reporting an item in the financial statements of a company. 10. The process of measuring and reporting the economic effects of transactions, events, and circumstances in the appropriate period when those effects occur, even though the cash consequences may occur in a different period.

Transactions and events are recognized initially at the exchange price to provide relevant and reliable information. . An accounting alternative is selected that is least likely to overstate assets and income. 9. The process of formally recording and reporting an item in the financial statements of a company. 10. The process of measuring and reporting the economic effects of transactions, events, and circumstances in the appropriate period when those effects occur, even though the cash consequences may occur in a different period.

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter17: Other Services Provided By Audit Firms

Section: Chapter Questions

Problem 24MCQ

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Qualitative Characteristics The following is a list of qualitativecharacteristics of useful accounting information identified in the FASB'sand the IASB's Statement of Financial Accounting Concepts No. 8 andstatements describing the qualities. A. ComparabilityB. Decision usefulnessC. RelevanceD. Faithful representation E. Predictive valueF. Confirmatory valueG. VerifiabilityH. NeutralityI. Free from error J. ConsistencyK. MaterialityL. TimelinessM. UnderstandabilityN. Completeness _ _ _ _ _ _1. Different knowledgeable and independent observers conreach consensus that a particular representation is faithful_ _ _ _ _ _2. Making information available to decision makers before itloses its capacity to influence decisions._ _ _ _ _ _3. Capacity to make a difference in a decision, enabling users to predict future outcomes and/or confirm prior expectations._ _ _ _ _ _4. Overall objective of financial information. _ _ _ _ _ _ 5. Absence of bias intended to influence financial statementusers'…