Which of the Following Types of Receivables Would Not Deserve

question 51

Multiple Choice

Which of the following types of receivables would not deserve the special attention of the auditor?

• A)Accounts receivables with credit balances
• B)Accounts that have been outstanding for a long time
• C)Receivables from related parties
• D)Each of the above would receive special attention.

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Definitions:

Net Sales

The amount of revenue from sales transactions after deductions for returns, allowances, and discounts have been taken into account.

Accounts Receivables

Accounts Receivables are amounts owed to a business by its customers for goods or services delivered on credit, representing assets on the balance sheet.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its assets to generate sales revenue, calculated as sales divided by total assets.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.