Tests of Controls Are Directed Toward the Control's

question 77

Multiple Choice

Tests of controls are directed toward the control's:

• A) efficiency.
• B) effectiveness.
• C) efficiency and effectiveness.
• D) cost benefit ratio.

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Definitions:

Uncollectible Accounts

Receivables that are recognized as losses after all attempts to collect the money owed have failed, indicating debts unlikely to be recovered.

Allowance for Doubtful Accounts

A contra-asset account that reduces the total receivables amount to reflect what is expected to be collectible.

Bad Debts Expense

An expense account reflecting the cost of accounts receivable that a company does not expect to collect.

Uncollectible Accounts

Refers to receivables that are deemed unlikely to be collected, indicating potential losses for a company.