Foreseeable Third Parties Are Best Described as

question 3

Multiple Choice

Foreseeable third parties are best described as

• A)Management of the company.
• B)Those that have direct involvement through a contract.
• C)Those third parties who will rely on the audit and are specifically known by the auditor.
• D)Those third parties who potentially will rely on the audit but are not specifically known by the auditor.

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Definitions:

Balance Sheet

A ledger entry that captures the financial position of an enterprise, recording assets, liabilities, and shareholder equity on a particular date.

Financial Statements

These are formal records of the financial activities and condition of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Adjusted Trial Balance

A statement that lists all the account titles and balances of a company after making necessary adjustments but before the preparation of financial statements.

Unearned Revenue

Money received by a business for goods or services yet to be provided; classified as a liability until the service or product is delivered.