To Determine Whether Any Accounts Receivable Are Pledged or Assigned

question 52

Multiple Choice

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

• A)examine subsequent collections.
• B)test a sample of transactions to the general ledger.
• C)review loan agreements and board of directors' minutes.
• D)derive an independent estimate of the allowance and compare it to pledged assets.

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Definitions:

Capital Letters

Uppercase letters used to indicate proper nouns, the beginning of sentences, or for emphasis.

Invalid Data

Information or data that is incorrect, outdated, or irrelevant, making it unusable for processing or analysis.

Electronic Claims

Submission of insurance claims using electronic means, typically through specialized software or web-based services, to expedite processing and reimbursement.

Cost-Efficient

A term describing a process or product that minimizes cost while maximizing effectiveness, often used in financial and operational planning.