What Is the Most Important Test of Details of Balances

question 104

Multiple Choice

What is the most important test of details of balances for accounts receivable?

• A) obtaining confirmations from the client's customers
• B) recalculating the aged receivables and uncollectible accounts
• C) tracing credit memos for returned merchandise to receiving room reports
• D) tracing from shipping documents to journals to the accounts receivable ledger

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Definitions:

SEC Rule 12b-1

A regulation by the U.S. Securities and Exchange Commission that allows mutual funds to charge their shareholders for advertising and sales promotion expenses.

Marketing Expenses

Costs associated with promoting a company, product, or service, including advertising, product samples, and event sponsorships.

Fund Assets

The total value of all the securities and cash held by an investment fund.

Exchange-traded Fund

A type of investment fund and exchange-traded product, i.e., they are traded on stock exchanges. ETFs hold assets such as stocks, commodities, or bonds and generally operate with an arbitrage mechanism designed to keep it trading close to its net asset value.