The Bourbon Street Ice Cream Company discovers that depreciation expense was overstated last year. How should this discovery be reported in the current year?
A) as a reduction in the current year's depreciation expense
B) as an increase to the retained earnings beginning balance
C) as a miscellaneous item in the Other Revenue/Expense section of the income statement
D) as a footnote only to the current year's financial statements
B
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________ is a cooperative social media application making use of the network effect
A) Media sharing B) Rich site summary C) Media tagging D) Instant messaging E) A discussion forum
The five steps in applying materiality are listed below in random order
1. Estimate the combined misstatement. 2. Estimate the total misstatement in the segment. 3. Set materiality for the financial statements as a whole. 4. Determine performance materiality. 5. Compare combined estimate with preliminary judgment about materiality. The first three steps in correct sequence would be A) 1, 2, 5 B) 3, 4, 2 C) 2, 1, 5 D) 3, 2, 4