When Auditors Choose to Send Confirmations of Accounts Payable, Accounts

question 84

Multiple Choice

When auditors choose to send confirmations of accounts payable, accounts with _______.

• A)zero or small balances should be among those selected for negative confirmation because they may be more understated than accounts with large balances
• B)zero or small balances should be ignored because they are likely immaterial
• C)zero or small balances should be among those selected for confirmation because they may be more understated than accounts with large balances
• D)extremely large balances should be among those selected for confirmation because they may be more understated than accounts with smaller balances

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Definitions:

Protectionism

Economic policy of restricting imports from other countries through methods such as tariffs and import quotas, to protect domestic industries.

Domestic Producers

Local manufacturers or growers of goods within a country's borders.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Trade Gains

Benefits that countries obtain from engaging in international trade, such as increased variety of goods and specialization in production.