Which action verifies licenses and permits held by a business?

Which action verifies licenses and permits held by a business?

• A. Review tax returns
• B. Review bank statements
• C. Contact government agency to verify licenses and permits
• D. All of the above

Answer: (C)

Verifying licenses and permits requires checking with the official source that issues and maintains those records. Contacting the government agency responsible for licenses—such as the state licensing board or local licensing office—gives you access to current, authoritative information about whether the business holds valid licenses and permits, when they expire, and any disciplinary actions that may affect compliance. This direct verification confirms the legal credentials needed to operate. Reviewing tax returns or bank statements can reveal financial activity, but they don’t confirm the status of licenses or permits. They may hint at legitimacy or operations, yet they don’t replace the formal verification from the issuing authority.

Verifying licenses and permits requires checking with the official source that issues and maintains those records. Contacting the government agency responsible for licenses—such as the state licensing board or local licensing office—gives you access to current, authoritative information about whether the business holds valid licenses and permits, when they expire, and any disciplinary actions that may affect compliance. This direct verification confirms the legal credentials needed to operate.

Reviewing tax returns or bank statements can reveal financial activity, but they don’t confirm the status of licenses or permits. They may hint at legitimacy or operations, yet they don’t replace the formal verification from the issuing authority.