It Is Sometimes Impossible for the Auditors to Use Normal

question 47

Multiple Choice

It is sometimes impossible for the auditors to use normal accounts receivable confirmation procedures.In such situations,the best alternative procedure the auditors might resort to would be:

• A)Examining subsequent receipts of year-end accounts receivable.
• B)Reviewing accounts receivable aging schedules prepared at the balance sheet date and at a subsequent date.
• C)Requesting that management increase the allowance for uncollectible accounts by an amount equal to some percentage of the balance in those accounts that cannot be confirmed.
• D)Applying analytical procedures to accounts receivable and sales on a year-to-year basis.

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Definitions:

Nearest Cent

Rounding a monetary amount to the closest cent, typically as part of currency calculations to ensure practical transactions.

Decimal Places

The number of digits to the right of a decimal point in a number.

Exponential Rate

A growth rate characteristic of functions of the form y = a * e^(bx), where e is the base of the natural logarithm, approximately equal to 2.71828.

Decimal Places

Decimal places refer to the number of digits to the right of the decimal point in a number. For example, in the number 3.142, there are three decimal places.