An Effective Accounting System Is Designed to Provide Which of the Following

question 29

Multiple Choice

An effective accounting system is designed to provide which of the following to help discover fraud?

• A) An audit trail
• B) Matching of expenses to revenues
• C) Set of controls
• D) Set of accounting procedures

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Definitions:

Maturity Date

The specified date when the principal amount of a financial instrument, such as a bond or loan, becomes due and payable.

Allowance Method

An accounting technique that estimates and accounts for bad debts expense, reducing accounts receivable by a predicted amount of uncollectible accounts.

Outstanding Receivables

Amounts due to a company for goods or services that have been delivered or sold but not yet paid by customers.

Allowance for Doubtful Accounts

A contra asset account that reflects the estimated amount of accounts receivable that may not be collectible.