Which of the following is not a misstatement of the financial statements?
A) The client 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

Different inventory accounting methods for internal and external reporting are allowed and not considered a misstatement as long as they are properly disclosed in the financial statements. B, C and D are all misstatements as they violate GAAP or omit required disclosures or contain errors in accounting estimates.

Which of the Following Is Not a Misstatement of the Financial