The 2000 Accounts Receivable of ABC Company Have a Total

question 17

Multiple Choice

The 2000 accounts receivable of ABC Company have a total book value of $40,000.Bob Rotter,CPA,has selected and audited a sample of 100 accounts with a total book value of $1,950.The audited value of the 100 accounts in the sample is $1,875. Using the ratio estimation technique,Rotter's estimate (to the nearest dollar) of year-end accounts receivable balance would be:

• A)$37,500
• B)$38,462
• C)$38,500
• D)$41,600

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Definitions:

Shareholder Lawsuits

Legal actions initiated by investors against a corporation’s management or board, typically for breaches of fiduciary duty.

Accounting Irregularity

Instances of non-compliance with accounting standards or practices, often leading to misstated financial statements.

Financial Statement Data

Quantitative information derived from a company's financial statements, used for analysis and decision-making purposes.

Loan Covenants

Loan covenants are conditions that lenders put on borrowing agreements to limit the actions of the borrower, protecting the lender’s interests.