When Positive Confirmations Are Used, ASA 505 Requires Follow-Up Procedures

question 37

Multiple Choice

When positive confirmations are used, ASA 505 requires follow-up procedures for confirmations not returned by the customer.In such a situation, which of the following would NOT be classified as an alternative procedure?

• A) Send a second confirmation request.
• B) Examine subsequent cash receipts to determine if the receivable has been paid.
• C) Examine the customer's purchase order and the duplicate sales invoice to determine if the merchandise was ordered.
• D) Examine shipping documents to verify that the merchandise was shipped.

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Definitions:

Standard of Living

The degree of wealth, comfort, material goods and necessities available to a person, group, or society.

Discouraged Workers

Refers to individuals who have stopped looking for work because they believe no jobs are available for them.

Unemployment Rate

The part of the labor force comprising people who are not employed and are actively seeking jobs.

Unemployment Rate

The measure of the percentage of the labor force that is unemployed and actively looking for employment.