The Best Procedure for Dealing with a Non-Response to a Third

question 20

Multiple Choice

The best procedure for dealing with a non-response to a third positive request for confirmation of an accounts receivable is:

• A) assume that the debtor's value is correct
• B) write-off the balance as a bad debt
• C) examine subsequent cash collections
• D) involve the client in chasing up the debtor

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Definitions:

Diseconomies of Scale

A situation in which production costs increase as a firm’s output increases, leading to decreased efficiency.

Decreasing Returns to Scale

Decreasing Returns to Scale occurs when a firm increases all inputs by a certain proportion, but the output increases by a smaller proportion, indicating reduced efficiency.

Average Costs

The total cost of production divided by the number of units produced, often used to assess efficiency and profitability.

Decreasing Returns to Scale

A situation in which increasing the scale of production leads to a proportionally smaller increase in output, often due to inefficiencies.