Statements on Standards for Accounting and Review Services (SSARS) require an accountant to report when the accountant has:
A. proposed correcting journal entries to be recorded by the client that change client-prepared financial statements.
B. typed client-prepared financial statements, without modification, as an accommodation to the client.
C. provided an entity with a financial statement format that does not include dollar amounts, to be used by the entity in preparing financial statements.
D. generated financial statements prepared in accordance with a special purpose framework other than GAAP.
Answer: D
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a. True b. False Indicate whether the statement is true or false
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On December 1, 20X8, Winston Corporation acquired 10 deep discount bonds from Linked Corporation at a cost of $400 per bond. Winston classifies them as available-for-sale securities. On this same date, it decides to hedge against a possible decline in the value of the securities by purchasing, at a cost of $250, an at-the-money put option to sell the 10 bonds at $400 per bond. The option expires on February 20, 20X9. Selected information concerning the fair values of the investment and the options follow: December 1, December 31, February 20, 20X8 20X8 20X9Linked Corporation Per Bond: $400 ? ? Put Option (100 shares) Market Value $250 $400 $400 Intrinsic Value 0 ? 400 Time
Value $250 $100 ? Assume that Winston exercises the put option and sells Linked bonds on February 20, 20X9.Based on the preceding information, the journal entry made on December 31, 20X8 to record the decrease in the time value of the options will include: A. a credit to Put Option for $300. B. a credit to Put Option for $100. C. a debit to Loss on Hedge Activity for $150. D. a debit to Loss on Hedge Activity for $300.