Which of the Following Control Activities Would an Entity Most

question 55

Multiple Choice

Which of the following control activities would an entity most likely use to assist in satisfying the completeness assertion related to long-term investments?

• A) Senior management verifies that securities in the bank safe-deposit box are registered in the entity's name.
• B) The internal auditor compares the securities in the bank safe-deposit box with recorded investments.
• C) The treasurer vouches the acquisition of securities by comparing brokers' advices with canceled checks.
• D) The controller compares the current market prices of recorded investments with the brokers' advices on file.

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Definitions:

Percentage of Sales

A financial ratio that helps determine the relative profitability of a product by comparing the percentage of total sales that the product represents.

Aging Analysis

A method used to estimate the collectability of accounts receivable by categorizing them according to their age, usually in 30-day increments.

Historical Relationship

Refers to the analysis of past interactions or correlations between variables to predict future trends or behaviors.

Bad Debt Expense

This refers to the amount of receivables a company does not expect to collect and hence records as an expense on its income statement.