An Audit

question 242

Multiple Choice

An audit:

• A) Is required for every business.
• B) Is an independent review of an organization's accounting systems and records.
• C) Is performed to add credibility to the financial statements.
• D) Is only performed for companies with computerized accounting systems.
• E) Is an independent review of an organization's accounting systems and records and is performed to add credibility to the financial statements.

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Definitions:

Notes Receivable Dishonored

A note that was not paid by the maker at its due date, considered a defaulted payment.

Protest Fee

A fee charged for formally declaring a party's disagreement or refusal to accept a financial obligation or document, often relating to banking instruments like checks.

Pledging Accounts Receivable

The use of accounts receivable as collateral for a loan.

With Recourse

A term indicating that the seller of the receivable is liable if the debtor fails to pay the owed amount.