Which of the Following Is an Assertion

question 47

Multiple Choice

Which of the following is an assertion?

• A) A statement made by management regarding the collectability of accounts receivable.
• B) The audit firm's estimation of the client's inventory obsolescence.
• C) The statement by management regarding the appointment of auditors.
• D) The statement by management that the firm will close its branch office because of snow.

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Definitions:

Lockbox System

A service offered by banks to companies for the collection of payments from customers, wherein the payments are sent directly to a post office box, thereby speeding up collection times.

Processing Time

The amount of time required to complete a specific process or task, often related to manufacturing or computational operations.

Preauthorized Payment

A financial arrangement that allows a business or individual to automatically debit funds from a customer's bank account for recurring expenses.

Total Collection Time

The period it takes for a business to convert its credit sales into cash, encompassing the entire process from sale to cash collection.