Lewis Corporation Has a Few Large Accounts Receivable That Total

question 20

Multiple Choice

Lewis Corporation has a few large accounts receivable that total one million dollars, whereas Clark Corporation has many small accounts receivable that total one million dollars. Misstatement in any one account is more significant for Lewis corporation because of the concept of

• A) materiality.
• B) audit risk.
• C) reasonable assurance.
• D) comparative analysis.

---

Definitions:

Government Purchases

Expenditures by government entities for goods and services that directly satisfy public consumption or are invested in public infrastructure.

GDP

Gross Domestic Product (GDP) measures the total value of all goods and services produced within a country's borders in a specific time period, serving as a broad indicator of its economic performance.

Net Exports

The value of a country's total exports minus its total imports.

Balance Trade Deficit

A situation where the value of a country's imports exceeds the value of its exports, leading to a negative balance of trade.