In Response to an Accounts Receivable Confirmation, a Customer Indicated

question 254

Multiple Choice

In response to an accounts receivable confirmation, a customer indicated that the invoice listed on the confirmation letter had been paid two months earlier. This may indicate that:

• A) The receivable was selected for confirmation in error.
• B) The customer is a bad credit risk.
• C) The receivable should be written off.
• D) Fraudulent activity has occurred.

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Definitions:

Indirect Expenses

Costs that are not directly attributable to the production of goods or services, such as administrative and marketing expenses.

Profitability

The degree to which a business or activity yields profit or financial gain.