Which of the Following Strategies Most Likely Could Improve the Accuracy

question 1

Multiple Choice

Which of the following strategies most likely could improve the accuracy of the confirmation of accounts receivable?

• A)Including a monthly statement of the customer's account with the confirmation.
• B)Restricting the selection of accounts to be confirmed to those customers with relatively large balances.
• C)Requesting customers to respond to the confirmation requests directly to the auditor by fax or e-mail.
• D)Notifying the recipients that second requests will be mailed if they fail to respond in a timely manner.

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Definitions:

Early Redemption

The act of returning a financial instrument, such as a bond, before its maturity date, often subjecting the holder to a penalty or reduced return.

Term Deposit

A financial vehicle offered by banks that locks funds for a certain period, earning a specified interest rate.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories, and meeting short-term liabilities.

Simple Interest

Interest calculated only on the principal amount, or on that portion of the principal amount that remains unpaid.