P 2-7 Required Answer the following multiple-choice questions: a. Which party has the primary responsibility for the financial statements? 1. Bookkeeper 2. Auditor 3. Management 4. Cost accountant 5. None of the above. b. Which of the following is a type of audit opinion that a firm would usually prefer? 1. Unqualified opinion 2. Qualified opinion 3. Adversc opinion 4. Clear opinion 5. None of the above. poring Topics 79 c. Which of the following statements is true? 1. You are likely to regard an adverse opinion as an immaterial issue as to the reliability of the financial statements. 2. A disclaimer of opinion indicates that you should look to the auditor's report as an indication of the reliability of the statements. 3. A review consists principally of inquiries made to company personal and analytical procedures applied to financial data. 4. When the outside accountant presents only financial information as provided by management, he or she is said to have reviewed the financial statements. 5. None of the above. d. This item need not be provided with a complete set of financial statements: 1. A 20-year summary of operations 2. Note disclosure of such items as accounting policies 3. Balance shect 4. Income statement 5. Statement of cash flows e. Which of the following statements is true? 1. Financial statements of legally separate entities may be issued to show financial position, income, and cash flow as they would appear if the companies were a single entity (consolidated). 2. Consolidated statements reflect a legal, rather than an economic, concept of the entity. 3. The financial statements of the parent and the subsidiary are consolidated for all majority-owned subsidiaries. 4. Consolidated statements are rare in the United States. 5. The acceptance of consolidation has been decreasing