Question

From Barraza Airlines Form 10-K, December 2019.

Ernst & Young: Report of Independent Registered Public Accounting Firm

“We have audited the accompanying consolidated balance sheets of Barraza Airlines as of December 31, 2019 and December 31, 2018, and the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes...

In our opinion, the financial statements present fairly, in all material respects, the financial position of the company at December 31, 2019 and December 31, 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.”

Which type of opinion did Barraza Airlines receive from its external auditor?

	a.	Review
	b.	Dsiclaimer
	c.	Qualified
	d.	Adverse
	e.	Unqualified

The consistency assumption:

	a.	primarily involves periodic income measurement.
	b.	has the expectation that the business entity will continue indefinitely
	c.	requires companies to use the same accounting methods for comparable transactions from period to period.
	d.	requires using the reporting alternative with the least favorable impact on net income and financial position.
	e.	requires that only events with an economic impact be recorded Kohl's purchases many items for resale. Valuing inventory at lower of cost or net realizable value is an application of the _____________ assumption. a. going concern b. time period c. materiality d. conservatism e. expense recognition

Answer 1

1) E - unqualified opinion is to be expressed by the auditor in case the financial statements are present fairly, in all material respects.

2) C- requires companies to use the same accounting methods for comparable transactions from period to period.

3) A- Going concern.