Which of the Following Is the Principle "Weakness" of Using

question 31

Multiple Choice

Which of the following is the principle "weakness" of using negative confirmations for the tests of details of balances for accounts receivable?

• A)They can only be used for large balance accounts.
• B)They cannot not be used when account balances "bunch" around a mean value.
• C)Conclusions drawn from receiving no reply may not be correct.
• D)Response rates are generally too low to draw any conclusions.

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Definitions:

Bond Indenture

A legal and binding contract between a bond issuer and the bondholders, specifying the terms of the bond such as the interest rate, maturity date, and other conditions.

Flotation Costs

Expenses associated with issuing new stocks or bonds, including fees for underwriting services, legal counsel, and registration.

Venture Capitalist

An investor who provides capital to startup companies and small businesses with perceived long-term growth potential.

Equity Position

An equity position refers to ownership interest in a company through the holding of shares or stocks, indicating partial ownership.