A Customer Reply on a Positive Confirmation Says "We Dispute

question 44

Multiple Choice

A customer reply on a positive confirmation says "We dispute the $250 charge. We believe it is excessive." This confirmation:

• A)provides evidence of existence.
• B)does not provide evidence of existence because the customer may refuse to pay the $250 charge.
• C)provides evidence that the account was understated.
• D)provides evidence that the account should be written off.

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Definitions:

Margin of Safety

A financial metric that measures the difference between actual sales and the break-even point, indicating risk level.

Variable Expenses

Expenses that vary directly with changes in production volume or business activity levels.

Fixed Expenses

Costs that do not vary in the short term, regardless of the level of goods or services produced by the business.

Actual Sales

The total revenue a company generates from selling its goods or services, as opposed to projected or forecasted sales.