An Aged Trial Balance of Accounts Receivable Is Usually Used

question 8

Multiple Choice

An aged trial balance of accounts receivable is usually used by the auditor to:

• A)verify the existence assertion for recorded receivables.
• B)ensure that all accounts receivable are recorded (completeness assertion).
• C)evaluate the results of tests of controls for the sales/accounts receivable system.
• D)evaluate the provision for bad debts related to the valuation and allocation assertion.

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Definitions:

Foreign Currency Put Option

A financial derivative that gives the holder the right, but not the obligation, to sell a specific amount of foreign currency at a set price within a specified time period.

U.S. GAAP

United States Generally Accepted Accounting Principles, a framework of accounting standards, guidelines, and procedures used in the United States.

Foreign Exchange Risk

The potential for financial losses due to changes in exchange rates affecting the value of foreign-currency-denominated assets and liabilities.

Foreign Exchange Gain

Foreign Exchange Gain arises when a currency transaction results in receiving or paying fewer units of the home currency than initially anticipated due to exchange rate movements.