Which of the Following Statements Is INCORRECT Regarding Letters to Unsophisticated

question 9

Multiple Choice

Which of the following statements is INCORRECT regarding letters to unsophisticated clients?

• A) Citations to controlling authority should not be included.
• B) The letter should give the answer in the first paragraph.
• C) A practitioner should always attach a file memo to give the client more detailed information.
• D) All of the above are correct.

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Definitions:

Fixed Asset Accounts

Accounts used in accounting to track the purchase, depreciation, and disposal of fixed assets, which are long-term tangible assets.

Current Ratio

A financial ratio that measures a company's ability to cover its short-term liabilities with its short-term assets, calculated as current assets divided by current liabilities.

Working Capital

The difference between a company's current assets and current liabilities, indicating the amount of liquid assets available to fund its day-to-day operations.

Chart of Accounts

A structured list of all the financial and nominal accounts in a company, detailing every type of transaction a business might conduct.