The Most Important Test for the Existence/occurrence Objective for Accounts

question 14

Multiple Choice

The most important test for the existence/occurrence objective for accounts receivable is:

• A) internal control over balances confirmed.
• B) ownership of the balances confirmed.
• C) existence of the balances confirmed.
• D) collectability of the balances confirmed.

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Definitions:

Competitive Industry

An industry in which no single firm has the power to influence the price of its product; there are many sellers and buyers, and products are largely homogeneous.

Limited Supply

A condition where the availability of a particular good is restricted in the market, often leading to increased prices.

Production Efficiency

A state in which the economy or a production process can no longer produce additional amounts of a good without lowering the production level of another product.

Long-Run Equilibrium

A state in which all factors of production can be adjusted, market supply equals demand, and economic agents have no incentive to change their behavior, leading to a steady-state market condition.