Once an Auditor Has Determined That Accounts Receivable at Year-End

question 13

Multiple Choice

Once an auditor has determined that accounts receivable at year-end have increased due to slow collections in a 'tight money' environment, the auditor would be likely to:

• A)review the going concern ramifications.
• B)increase the balance in the allowance for bad debts account.
• C)expand tests for the valuation and allocation assertion.
• D)expand tests for the existence assertion.

---

Definitions:

Barriers To Entry

Barriers to entry are obstacles that make it difficult for new competitors to enter a market, including high startup costs, strict regulations, and established brand dominance.

Monopoly Markets

Markets dominated by a single seller, leading to less competition and higher prices for consumers.

Government Intervention

Actions taken by a government to affect the economy, which can include regulations, subsidies, tariffs, and fiscal or monetary policies.

Deadweight Loss

The reduction in economic productivity that happens when a good or service does not reach or cannot reach its equilibrium state.