Communication Addressed to the Debtor Requesting Him or Her to Confirm

question 46

Multiple Choice

Communication addressed to the debtor requesting him or her to confirm whether the balance as stated on the communication is correct or incorrect is a

• A) representation letter.
• B) negative confirmation.
• C) bank confirmation.
• D) positive confirmation.

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that is expected to be uncollectible.

Merchandise Return

The process of returning purchased goods to the seller, typically due to defects, dissatisfaction, or other reasons.

Full Payment

The act of paying the entire amount due on an obligation, such as an invoice or loan, without any outstanding balance.

Promissory Note

A financial instrument involving a written promise by one party to pay another a definite sum of money either on demand or at a specified future date.