In Determining the Adequacy of the Allowance for Uncollectible Accounts

question 12

Multiple Choice

In determining the adequacy of the allowance for uncollectible accounts, the least valuable evidence would be obtained from:

• A)an aging schedule of past due accounts that the auditor has tested.
• B)correspondence with the client's collection agency.
• C)financial statements of individual customers.
• D)no reply to negative confirmations.

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Definitions:

Reflective Listening

A communication technique in which the listener repeats back what they hear to the speaker, to confirm understanding of both content and feelings.

Durable Power

A legal document that grants someone the authority to act on another person's behalf in legal and financial matters, continuing even if the principal becomes incapacitated.

General Power

The authority granted to an individual or body to make all necessary decisions in managing an entity's affairs within its objectives and purposes.

Negligently Dropped

A term referring to carelessly losing or letting go of something, potentially leading to liability if it causes harm or loss.