To Determine If the Client Has Rights to the Accounts

question 120

True/False

To determine if the client has rights to the accounts receivable on the trial balance, the auditor should inquire of management if any receivables are pledged or factored.

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Definitions:

Book Value

The net value of a company's assets subtracting the total liabilities, often used to assess a company's worth or the value of individual assets.

Salvage Value

The estimated resale value of an asset at the end of its useful life.

Cost Savings

Reductions in costs achieved through methods such as efficiency improvements, negotiations for better prices, or elimination of unnecessary expenses.

Product Line

A series of related products offered by a company, often serving a common market or purpose.