Topic 10 Identifying Problems
and Safeguards Quick Check
Comprehensive Questions
(Frequently Tested) with
Verified Answers Graded A+
Which of the following is NOT a reason for problems occurring in the financial statements? -
Answer: Safeguards
Which of the following statements is true about disagreements in the financial statements of a
company? - Answer: Disagreements result when different people arrive at different conclusions
based on the same set of facts.
If two different accountants were to estimate the percentage of customers who will NOT pay
their accounts (bad debts), they could arrive at different estimates. These differing estimates
would affect the financial statements. Such differences in assessing estimates are due to: -
Answer: Disagreements in judgement
Failure to record the used portion of supplies on hand during the month has the following effect
on the financial statements prepared at the end of the month: - Answer: Overstates assets