Which of the Following Types of Receivables Would Not Deserve

question 50

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:

Price Fixing

The practice of colluding with other firms to control prices.

Marketing Channel

The paths or routes that products and services take from the time they are produced until they are purchased by consumers, including intermediaries such as distributors and retailers.

Horizontal Price Fixing

Occurs when competitors that produce and sell competing products collude, or work together, to control prices, effectively taking price out of the decision process for consumers.

Experience Curve Effect

Refers to the drop in unit cost as the accumulated volume sold increases; as sales continue to grow, the costs continue to drop, allowing even further reductions in the price.