Correct Answer:
C. Both material and pervasive
An adverse opinion says the financial statements do not present fairly because misstatements are material and pervasive.
November 13, 2026 · Accounting and Finance MCQs, Auditing MCQs
An adverse opinion is issued when the effects of misstatements are:
Related MCQs
The principal budget factor is:
A.
The factor that limits the activities of an organization
B.
The largest expense
C.
The total of sales
D.
The profit target
Correct answer is:
A. The factor that limits the activities of an organization
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Purchase of equipment for cash is classified as a cash flow from:
A.
Investing activities
B.
Operating activities
C.
Financing activities
D.
It is not a cash flow
Correct answer is:
A. Investing activities
Do you agree with this answer?
Drawings made by the owner of a sole proprietorship:
A.
Reduce the owner's equity (capital)
B.
Increase the owner's equity
C.
Are recorded as business expenses
D.
Are recorded as revenue
Correct answer is:
A. Reduce the owner's equity (capital)
Do you agree with this answer?
Lapse of appropriation means that:
A.
Unspent funds carry forward automatically
B.
The budget is increased
C.
Unspent budget allocations expire at the end of the fiscal year
D.
Audit is cancelled
Correct answer is:
C. Unspent budget allocations expire at the end of the fiscal year
Do you agree with this answer?
The matching principle requires that:
A.
Expenses are recorded in the same period as the revenues they helped to earn
B.
Debits equal credits
C.
Assets equal liabilities
D.
Revenues are recorded when cash is received
Correct answer is:
A. Expenses are recorded in the same period as the revenues they helped to earn
Do you agree with this answer?
The strong form of the Efficient Market Hypothesis states that share prices reflect:
A.
Only past price information
B.
Only public information
C.
Only accounting information
D.
All information, public and private
Correct answer is:
D. All information, public and private
Do you agree with this answer?
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