In Evaluating the Adequacy of the Allowance for Doubtful Accounts

question 48

Multiple Choice

In evaluating the adequacy of the allowance for doubtful accounts, an auditor is most likely to review the aging of receivables as evidence and support for management's financial statement assertion of

• A)Existence or occurrence.
• B)Valuation or allocation.
• C)Completeness.
• D)Rights and obligations.

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Definitions:

Rational Behavior

implies making decisions based on logical reasoning, aiming for the most efficient outcome considering the available information.

Family Systems Theory

A theoretical perspective that views the family as an emotional unit and uses systems thinking to describe the complex interactions within the unit.

Equilibrium

A state of balance or stability within a system, where competing forces or influences are in equal opposition.

Nonprobability Sample

There is little or no attempt to get a representative cross-section of a population.