LEGAL ENTITY Definition

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LEGAL ENTITY is a person or organization that has the legal standing to enter into contracts and may be sued for failure to perform as agreed in the contract, e.g., a child under legal age is not a legal entity, while a corporation is a legal entity since it is a person in the eyes of the law.

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AUDIT OBJECTIVE is when in obtaining evidence in support of financial statement assertions, the auditor develops specific audit objectives in light of those assertions. For example, an objective related to the completeness assertion for inventory balances is that inventory quantities include all products, materials, and supplies on hand.

CORPORATE BOND is evidence of debt owed by a corpora­tion, issued for the purpose of borrowing money, and promising to return the face value of borrowed money at maturity. Corporate bonds usually pay interest at regular intervals twice each year.

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