Which of the Following Is an Example of a Reasonableness

question 75

Multiple Choice

Which of the following is an example of a reasonableness test?

• A)Estimate the account balance and determine whether that amount is close to what the client recorded.
• B)Inquire whether significant changes have been made.
• C)Tour the production facilities.
• D)Send confirmations to major vendors.

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Definitions:

Monopoly Firm

A company that is the sole provider of a product or service in a market, resulting in a lack of competition.

Price Maker

A market participant with the power to influence the price of a good or service by altering its supply, demand, or both.

Downward Sloping

Refers to a graph line that shows a decrease in price leading to an increase in demand, commonly illustrated in supply and demand curves.

Economic Profits

Profit or loss calculated by subtracting total costs, including opportunity costs, from total revenues to determine overall effectiveness.