Production cost reports prepared using first-in, first-out (FIFO) method determine the average cost of equivalent units of production by combining beginning inventory costs with current period costs

An auditor identified a material weakness in internal control in December. The client was informed and the client corrected the material weakness shortly after year-end (December 31); the auditor agrees that the correction eliminates the material weakness as of January 31. The appropriate audit report on internal control under PCAOB standards on reporting on internal control is:

A. Adverse. B. Unqualified C. Unqualified with explanatory language relating to the material weakness. D. Qualified.

Under current (rules prior to 2018) U.S. GAAP, minority, passive investments in equity securities are classified as either trading or available-for-sale. Fluctuations in fair value of these securities are reported as part of (OCI = other comprehensive income):

a. Net income for both types of security. b. OCI for both types of security. c. OCI if a trading security and net income if an available-for-sale security. d. Net income if a trading security and OCI if an available-for-sale security.