A7 Twatt - Chapter 7 Tiffany Watt Assignment: A7 Oct. 28,...

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Chapter 7 Tiffany Watt Assignment: A7 Oct. 28, 2011 AC 405 – E01 7-22. To which of the following accounts would the management assertion “valuation” be relevant, and why? For any accounts to which it would not be relevant, explain why. I. The management assertion ”valuation” would not be relevant for cash because there are not usually any valuation issues for cash valued in the domestic currency. II. The management assertion “valuation” would be relevant for cash when foreign currency translation is involved because there are complex steps that must be taken in order to translate the non-local currency into the local denomination. And in the process of taking such steps, the risks of making an error are increased. III. The management assertion “valuation” would not be relevant for gross amounts of accounts receivable because this is the total amount that is expected to be collected at a later date. IV. The management assertion “valuation” would be relevant for the net amount of accounts receivable because this amount is the difference of the total accounts to be received minus the uncollectible accounts. This uncollectible
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This note was uploaded on 02/02/2012 for the course BUSINESS 101 taught by Professor - during the Spring '11 term at Mississippi Valley State University.

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A7 Twatt - Chapter 7 Tiffany Watt Assignment: A7 Oct. 28,...

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