The Most Effective Audit Procedure for Determining If an Account

question 77

Multiple Choice

The most effective audit procedure for determining if an account receivable will be collected is ________.

• A)examination of cash collections subsequent to the year-end
• B)examination of sales invoice(s)
• C)confirmation of the account
• D)the review of the customer's file to determine previous collection experience and to check sales orders from the customer for evidence credit approval

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Definitions:

Quasi Contract

An obligation imposed by law to prevent unjust enrichment, even though no actual agreement exists between the parties involved.

Obligation Imposed

A duty or responsibility enforced by law, regulation, or agreement.

Contract Formation

The process whereby parties agree upon and establish the terms of a contract, leading to a binding legal agreement.

Relaxation of Requirements

The easing or reduction of stringent rules, standards, or conditions, often to accommodate special circumstances.