If the Client's Internal Control for Recording Sales Returns and Allowances

question 65

Multiple Choice

If the client's internal control for recording sales returns and allowances is evaluated as ineffective,

• A) a larger sample may be needed to verify cutoff.
• B) sampling is not appropriate.
• C) all sales returns must be traced to supporting documentation.
• D) all sales returns must be confirmed with the customer.

---

Definitions:

Market Structures

The organizational and competitive characteristics of markets, including aspects like the number of sellers and degree of product differentiation.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded, typically downward sloping, showing an inverse relationship between price and quantity demanded.

Concentration Ratio

A measure used in economics to assess the extent of market control by the top firms in an industry.

Oligopolies

A market structure characterized by a small number of large firms that dominate the market, often leading to limited competition and higher prices.