Required: Identify whether each of the following sentences would be found in (a) the auditors report; (b) the statement of managements responsibility for the financial statements; or (c) the notes to the financial statements.

1. Current income tax liabilities comprise those obligations to fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting date.

2. The financial statements were prepared by management in accordance with accounting principles generally accepted in the United States, applied on a consistent basis, and conform in all material respects with generally accepted accounting principles.

3. The principal activity of Acme Supplies Ltd. is the sale of wholesale goods.

4. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America.

5. Revenue arises from the rendering of service. It is measured by reference to the fair value of consideration received or receivable.

6. The audit committee of the board, which is comprised solely of directors who are not employees of the company, is appointed by the board of directors annually.

7. Land held for use in production or administration is stated at cost. It is not depreciated.

8. [] the financial statements referred to above present fairly, in all material respects, the financial position of Big Dog Carworks Corp. as at December 31, 2020, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

9. All shares are eligible to receive dividends, have their capital repaid, and represent one vote at the annual stockholders meeting.

10. We believe that our audit provides a reasonable basis for our opinion.

11. The stockholder loan is due on demand, noninterest bearing, and unsecured.

12. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

13. The preparation of these financial statements is in conformity with US generally accepted accounting principles (GAAP).

14. Management is responsible for the integrity and objectivity of the financial statements, and for producing reliable accounting records for the preparation of financial information.

16. Depreciation is recognized on a straightline basis to write down the cost, net of estimated residual value.

17. The independent stockholders auditor has unrestricted access to the audit committee. The audit committee also makes recommendations to the board with respect to the appointment and remuneration of the companys auditor.

18. Current income tax liabilities comprise those obligations to fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting date.

19. The audit committee of the board meets regularly with financial management of the company and with the stockholders independent auditor to discuss internal controls, audit matters, including audit scope and auditor remuneration, and financial reporting issues.

20. Operating expenses are recognized in the income statement upon utilization of the service or at the date of their origin.