The Most Effective Audit Procedure for Determining the Collectability of an Account

question 86

Multiple Choice

The most effective audit procedure for determining the collectability of an account receivable is the:

• A)review of the subsequent cash collections.
• B)examination of the related sales invoice(s).
• C)confirmation of the account.
• D)review of authorization of credit sales to the customer and the previous history of collections.

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Definitions:

Operating Efficiency

A measure of how well a company uses its resources to produce goods or services.

Great Distances

Large physical separations between objects or locations, often involving travel or communication across extensive areas.

Cross-Functional Team

A team that operates with members who come from different functional units of an organization.

Horizontal Structure

A form of organizational structure where control and decision-making are spread horizontally across levels, emphasizing collaboration and teamwork.