A Confirmation Is Performed Less Frequently for Accounts Payable Than

question 29

Multiple Choice

A confirmation is performed less frequently for accounts payable than it is for accounts receivable because

• A) only a negative confirmation can be sent.
• B) confirmation offers no assurance that unrecorded liabilities will be discovered.
• C) it is only performed when detection risk is high.
• D) it specifies the amount due to the supplier.

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Definitions:

Sale of Bonds

The process by which a company or government issues bonds to investors in order to raise capital, effectively borrowing from the bond purchasers.

Interest

The cost of borrowing money or the return on invested funds, expressed as a percentage of the principal amount.

Long-Term Investments

Investments held by a company that are intended to be kept for more than one year, such as stocks, bonds, or real estate, potentially generating income or appreciating in value.