To Determine Whether Any Accounts Receivable Are Pledged or Assigned

question 48

Multiple Choice

To determine whether any accounts receivable are pledged or assigned to others,the auditor would most likely perform which of the following procedures?

• A)Examine subsequent collections.
• B)Test a sample of transactions to the general ledger.
• C)Review loan agreements and board of directors' meeting minutes.
• D)Derive an independent estimate of the allowance and compare it to pledged assets.

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Definitions:

Allergy

An immune system reaction to a foreign substance that is not typically harmful to the body.

Adhesive

A substance used for sticking objects or materials together; commonly referred to as glue.

Vacuum Tube

An electronic device used to control the flow of electricity in a vacuum, commonly used in early electronics such as radios and televisions.

Hematoma

A tumor or swelling that contains blood.