In Evaluating the Adequacy of the Allowance for Doubtful Accounts

question 31

Multiple Choice

In evaluating the adequacy of the allowance for doubtful accounts, an auditor most likely reviews the entity's aging of receivables to support management's financial statement assertion of:

• A) existence.
• B) completeness.
• C) rights and obligations.
• D) valuation or allocation.
• E) occurrence.

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Definitions:

International Monetary Fund

An international organization that aims to foster global monetary cooperation, secure financial stability, and facilitate international trade.

World Bank

An international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects.

U.S. Trade Deficit

The situation where the total value of goods and services the United States imports from other countries is more than the total value of goods and services it exports to those countries.

Net Exports

The difference between a country's total exports and total imports, representing the value of goods and services exported minus the value of goods and services imported.