Unusual Items:
(B) Unusual Items: Please give two examples of “unusual items” and explain if these items affect the current period income statement or a prior period income statement.
Why should these particular items be reported separately on the income statement? Please be specific.
(C) Audit Reports:
(1) What types of companies are required to obtain an independent audit and what is the purpose of the Audit Report?
(2) An “unqualified opinion” doesn’t sound very favorable; in fact, it sounds like the person giving the opinion does not have the proper credentials. Please clarify this issue. Wouldn’t a company rather receive a “qualified opinion?”
Also, does a clean opinion mean the financial statements are 100% error-free? Please explain.
(Note: Since you have posted multiple questions, we will solve the first question for you. For the remaining question, please re-post it.)
The unusual items are income or expenses that occur rarely. They do not arise frequently from the daily business activities.
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