Testing the Information on the Aged Trial Balance for Detail

question 2

Multiple Choice

Testing the information on the aged trial balance for detail tie-in is a necessary audit procedure which would normally include:

• A) tracing a sample of individual balances to supporting documents.
• B) comparing the total of the trial balance with the general ledger accounts receivable account.
• C) test footing the total column and the columns depicting the aging.
• D) all of the above

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including material and labor costs.

Finished Goods Inventory

Finished goods available for sale but still held within the company's inventory.

Overapplied Manufacturing Overhead

A situation where the allocated manufacturing overhead exceeds the actual manufacturing overhead incurred.

T-account

A graphical representation of a ledger account, illustrating the debit and credit sides for easier accounting analysis.