Which answer is right? 8. When should equitable accounting principlesoverride strict legal interpretations? (A) Courtdecisions dictate all entries (B) Legal form alwaysdetermines treatment (C) Substance of economicrelationships demands fair representation (D)Statutory rules apply without exception

Explanation of Equitable Accounting Principles:Equitable accounting principles focus on presenting…

Answered: 8. When should equitable accounting…

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 22MCQ

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Financial Accounting
Which of the following sets of conditions would give rise to the accrual of a contingency under current generally accepted accounting principles? Group of answer choices Amount of loss is reasonably estimable and event occurs infrequently. Amount of loss is reasonably estimable and occurrence of event is probable. Event is unusual in nature and occurrence of event is probable. Event is unusual in nature and event occurs infrequently.
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Explanation of Question
With respect to the concept of materiality, which of the following statements is correct?a. Materiality depends only on the dollar amount of an item relative to other items in the financial statements.b. Materiality depends on the nature of a transaction rather than the dollar amount of the transaction.c. Materiality is determined by reference to AICPA guidelines.d. Materiality is a matter of professional judgment.

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8. When should equitable accounting principles override strict legal interpretations? (A) Court decisions dictate all entries (B) Legal form always determines treatment (C) Substance of economic relationships demands fair representation (D) Statutory rules apply without exception