Which of the Following Most Likely Would Give the Most

question 46

Multiple Choice

Which of the following most likely would give the most assurance concerning the valuation assertion for accounts receivable?

• A)Tracing amounts in the subsidiary ledger to details on shipping documents.
• B)Comparing receivable turnover ratios to industry statistics for reasonableness.
• C)Inquiring about receivables pledged under loan agreements.
• D)Assessing the allowance for uncollectible accounts for reasonableness.

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Definitions:

Salary Allowances

Pre-determined sums paid to employees above their regular salary to cover specific needs or expenses, such as travel or housing.

Stated Ratios

These are specific proportions or percentages explicitly mentioned or defined, typically used in financial analysis to assess a company's performance.

Salaries

Payments made to employees for their services over a specified period, often monthly or biweekly.

Interest

This refers to the cost of borrowing money, expressed as a percentage of the borrowed amount, payable to the lender at a specified rate and time.