Risk Assessments Can Vary in Format, but Generally Include: 1

question 391

Multiple Choice

Risk assessments can vary in format, but generally include: 1. A description of identified risks. 2. Tests of audit controls. 3. A system of rating risks. 4. Sample size identification.

• A) 1 and 2 only
• B) 1 and 3 only
• C) 1, 3, and 4 only
• D) 2, 3, and 4 only

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Definitions:

Uncollectible Accounts

Receivables that are deemed uncollectible and are written off as a loss due to the inability to collect the funds.

Allowance Account

An account used to offset the gross accounts receivable by the amount estimated to be uncollectible.

Accounts Receivable

Unsettled payments from customers to a business for goods delivered or services carried out.

Note Receivable

A financial asset representing a promise for future receipt of cash, typically arising from sales or loans, evidenced by a written promise to pay.