Evaluating a Prospective Client Requires Which of the Following Steps

question 65

Multiple Choice

Evaluating a prospective client requires which of the following steps?

• A)Communicate with the SEC.
• B)Preplan the audit.
• C)Determine if the firm is independent of the client.
• D)Communicate with the AICPA.

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Definitions:

Owner's Capital

The equity in a firm attributable to the owner, reflecting the amount invested by and the earnings retained for the business owner.

Accounts Receivable

Monies owed to a company by customers for sales made on credit that are recorded as assets on the balance sheet.

General Journal

A foundational accounting record that keeps chronological entries of a company's transactions.

T-Accounts

A visual representation used in accounting to depict the debits and credits for each financial transaction affecting a particular account.