The Primary Purpose of Sending a Standard Confirmation Request to Financial

question 64

Multiple Choice

The primary purpose of sending a standard confirmation request to financial institutions with which the entity has done business during the year is to

• A) Detect kiting activities that may otherwise not be discovered.
• B) Corroborate information regarding deposit and loan balances.
• C) Provide the data necessary to prepare a proof of cash.
• D) Request information about contingent liabilities and secured transactions.

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Definitions:

Single-Entry System

An accounting method where each transaction is recorded only once, either as an income or an expense, not used in double-entry bookkeeping.

Accounting Documents

Records that encapsulate financial transactions and positions relevant to a business or individual.

Invoices

Documents issued by a seller to a buyer, detailing products or services provided, prices, terms of sale, and payment instructions.

Payroll Documents

Records related to the payment of employees, including details on wages, deductions, and hours worked.