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An Effective Procedure to Test the Existence Objective for Sales

question 59

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An effective procedure to test the existence objective for sales is to vouch sales journal entries to copies of sales orders, shipping documents, and sales invoices.


Definitions:

FTC Rule

A regulation established by the Federal Trade Commission (FTC) to protect consumers and maintain competition.

Holder In Due Course

A legal term for someone who has acquired a negotiable instrument in good faith and for value, therefore having certain rights to it free of defenses.

Post-Dating

Writing a future date on a document or check, thereby delaying its effectiveness or negotiability until that date.

Negotiability

The feature of a financial instrument that allows it to be transferred or assigned from one party to another with the legal ownership and benefits passing to the transferee.

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