An Example of Alternative Procedures for the Confirmation of Accounts

question 90

Multiple Choice

An example of alternative procedures for the confirmation of accounts receivable includes which of the following?

• A)inquiry of management.
• B)tracing source documents to recorded amounts.
• C)review of subsequent collections on account by the client.
• D)providing an estimate of the allowance for doubtful accounts to be recorded by the client.

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Definitions:

Net Operating Income

Earnings before interest and taxes (EBIT); a measure of a company's profitability from its regular, core operations.

Unit Variable Cost

The variable cost associated with producing one additional unit of product.

Net Operating Income

A company's revenue minus its direct and indirect operating expenses, excluding taxes and interest, reflecting the profitability of its core business activities.

Monthly Sales

The total revenue generated from the sale of goods or services within a month.