Which of the following is not a misstatement of the financial statements?
A)The entity uses different inventory accounting methods for internal and external reporting.
B)A departure from GAAP.
C)The footnote for pensions is omitted.
D)A clerk incorrectly based the allowance for doubtful accounts on 31% of sales as opposed to 13% of sales as determined by the controller.

Question

Quizplus · Accepted Answer

Using different inventory accounting methods for internal and external reporting is not a misstatement of financial statements as long as proper disclosure is made in the footnotes. The other options all represent misstatements. B represents a departure from GAAP, which is not allowed. C represents an omission of important disclosure information, which is also a misstatement. D represents an error in the accounting process, which results in a misstatement of the financial statements.

Which of the Following Is Not a Misstatement of the Financial