Which of the following events occurring after the issuance of an entity's financial statements and the auditor's report most likely would cause the auditor to make further inquiries about the previously issued financial statements?
A. An uninsured natural disaster occurs that may affect the entity's ability to continue as a going concern.
B. A contingency is resolved that had been disclosed in the audited financial statements.
C. New information is discovered concerning undisclosed lease transactions in the audited period.
D. A subsidiary that accounts for 25 percent of the entity's consolidated net income is sold.
C. New information is discovered concerning undisclosed lease transactions in the audited period.
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Alpha and Beta are partners who share income in the ratio of 1:2 and have capital balances of $40,000 and $70,000 at the time they decide to terminate the partnership. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $50,000 . What amount of loss on realization should be allocated to Alpha?
a. $60,000 b. $20,000 c. $30,000 d. $50,000
One effect on the accounting equation when a firm borrows money is
a. stockholders' equity decreases. b. assets increase. c. liabilities decrease. d. assets decrease.
The informal communication processes within the organization, including stories, jokes, and gossip, constitute which of the following?
A. retention B. equifinality C. cultural network D. synergy
A perfected purchase money security interest in inventory is likely to have priority over a conflicting security interest in the same inventory if the:
A. holder of the competing security interest received notification within eight years before the debtor receives the inventory. B. purchase money secured party gives an oral notification to the prior secured creditor before the debtor receives the inventory. C. notification states that the person expects to acquire a purchase money security interest in inventory of the debtor and describes the inventory. D. purchase money security interest is perfected three months after the debtor receives possession of the inventory.