Which of the following steps must be completed before preparing the adjusted trial balance?
A) preparing the post-closing trial balance
B) posting of journal entries to the accounts
C) preparation of the closing entries
D) preparation of the financial statements
B
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Assume that the audit team notes the client has made a significant change in its product line which requires that new equipment be purchased. Which of the following would be of greatest concern to the auditor?
a. Inappropriate book value of new equipment. b. Impaired value of new equipment. c. Impaired value of old equipment. d. Inappropriate depreciation calculation for new equipment.
Which of the following could be described as both an advantage and a disadvantage of incorporation?
a. Continuous existence b. Limited liability c. Double taxation d. Lack of mutual agency
Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts,
A) total assets decrease. B) liabilities increase. C) total assets are unchanged. D) net income is unchanged.
Which of the following is NOT a type of free market?
A) monopoly B) oligopoly C) managed competition D) monopolistic competition E) perfect competition