Answer the following statements true (T) or false (F)
1. If a contingency is remote, the company does not need to record a liability and does not need to
disclose it in the notes to the financial statements.
2. A contingency was evaluated at year-end and considered to have a remote possibility of becoming an actual liability. If this is not reported on the balance sheet or in the notes to the financial statements, it could be considered a violation of generally accepted accounting principles.
3. A contingency was evaluated at year-end and considered to have a reasonable possibility of
becoming an actual liability. If this was not reported on the balance sheet or in the notes to the financial
statements, it could be considered a violation of generally accepted accounting principles.
4. Contingencies that are reasonably possible have a greater chance of occurring but are not likely.
5. Contingencies that are reasonably possible are not described in the notes to the financial statements.
1. True
2. False - The company does not need to record a remote contingent liability and does not need to
disclose it in the notes to the financial statement.
3. True
4. True
5. False - Contingencies that are reasonably possible should be described in the notes to the financial
statements.
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Auditor needs to assess disclosures about what lines of business the company may discontinue
a. True b. False Indicate whether the statement is true or false
A(n) ________ account is used to record increases in owner's equity from the sale of goods or services.
Fill in the blank(s) with the appropriate word(s).
A company purchased 400 units for $20 each on January 31. It purchased 200 units for $30 each on February 28. It sold a total of 270 units for $90 each from March 1 through December 31 If the company uses the last-in, first-out inventory costing method, calculate the amount of ending inventory on December 31. (Assume that the company uses a perpetual inventory system.)
A) $9,900 B) $23,100 C) $6,600 D) $330
When the unrealistically positive expectations of job applicants are lowered to match the reality of the actual work setting ________, job acceptance rates may be lower, but job performance, job satisfaction, and survival are higher for those who receive a realistic job preview.
A. before salary requirements are discussed B. after a few days on the job C. during orientation D. prior to hire