ANSWER KEY TO REVIEW QUESTIONS AND CASE STUDIES
2. False. A material error is an error that’s significant enough to cause someone to make a different decision than he would if he had the correct information.
4. False. Nearly all reports of business income should be prepared on a accrual basis.
7. False. External financial reports are prepared according to the rules of GAAP for people outside of the company, such as bankers or investors.
Case Study Qaestion:
2. a. or b. The terms are interchangeable.
5. False. Most companies freqaently encounter ...