Which of the Following Strategies Most Likely Could Improve the Response

question 207

Multiple Choice

Which of the following strategies most likely could improve the response rate of the confirmation of accounts receivable?

• A) Including a list of items or invoices that constitute the account balance.
• B) Restricting the selection of accounts to be confirmed to those customers with relatively large balances.
• C) Requesting customers to respond to the confirmation requests directly to the auditor by fax or e-mail.
• D) Notifying the recipients that second requests will be mailed if they fail to respond in a timely manner.

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Definitions:

IFRS

International Financial Reporting Standards, which are accounting rules set by the International Accounting Standards Board (IASB) for the preparation of financial statements globally.

GAAP

Stands for Generally Accepted Accounting Principles, which are a common set of accounting rules and standards used in the United States.

Notes Payable

Written agreements where a borrower promises to pay back a specified sum to the lender at a future date.

Adjusting Entry

A journal entry made at the end of an accounting period to record any unrecognized income or expenses for that period.