You Are Auditing Rodgers and Company and Have Noticed That

question 65

Multiple Choice

You are auditing Rodgers and Company and have noticed that accounts receivables have increased from the previous year because of financial problems with its customers. Your likely first response would be to:

• A) expand tests regarding account balance collectability.
• B) increase the allowance for uncollectible accounts for the client.
• C) communicate to the client that credit policy must be reviewed.
• D) increase the sample size of past due accounts.

Analyze and interpret the sales mix and its impact on company performance.

Calculate and understand the significance of operating leverage in predicting changes in operating income.

Determine the variable and fixed costs from given data, and understand their impact on the company’s profitability.

Understand and calculate the contribution margin and its role in assessing a company’s profitability.

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Definitions:

Function

The intended purpose or role of an object, system, or process, often related to what it does or is used for.

Amazon

An American multinational technology company primarily known for its e-commerce operations, cloud computing, digital streaming, and artificial intelligence.

Supply Chain

The entire system of producing and delivering a product or service, from the initial sourcing of materials to the final delivery to consumers.

Logistics Management

Logistics management is the part of supply chain management that plans, implements, and controls the efficient, effective forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption to meet customers' requirements.