ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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LIQUIDITY is a. a companys ability to meet current obligations with cash or other assets that can be quickly converted to cash; b. in securities, it is the ease with which an instrument can be bought or sold at or near prevailing market prices in the secondary market (often reflected by the range of the bid-asked spread).
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NONSAMPLING RISK is audit risk not due to sampling. An auditor may apply a procedure to all transactions or balances and fail to detect a material misstatement. Nonsampling risk includes the possibility of selecting audit procedures that are not appropriate to achieve a specific objective. For example, confirming recorded receivables cannot reveal unrecorded receivables. Nonsampling risk can be reduced to a negligible level through adequate planning and supervision.
BAD DEBT EXPENSE see UNCOLLECTIBLE ACCOUNT EXPENSE.