Frag Jones Company Has a December Year End with a Tight

question 35

Multiple Choice

Frag Jones Company has a December year end with a tight reporting deadline,so the auditors confirmed the accounts receivable as of November 30 using positive confirmations.In addition to following up confirmation discrepancies,the auditor should

• A)test December transactions.
• B)send negative confirmations as of the end of December.
• C)test November transactions.
• D)do cutoff testing for the month of October.

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Definitions:

Economic Concentration

The degree to which a small number of firms occupy a large proportion of the market in a particular industry.

Market Shares

The portion of a market controlled by a particular company or product.

Horizontal Merger

A business consolidation that occurs between firms that operate in the same industry.

Airline

A company that provides air transport services for traveling passengers and freight.