Making Sure That the Detail of and Accounts Receivable File

question 19

Multiple Choice

Making sure that the detail of and accounts receivable file agrees with the general ledger before the file is used to produce confirmations is an example of which of the following audit procedures?

• A) Confirmation.
• B) Recalculation.
• C) Reperformance.
• D) Vouching.
• E) Tracing.

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Definitions:

Revenues

The gross increase in owner’s equity resulting from business activities entered into for the purpose of earning income.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Nonfinancial Information

Data that relates to the operational, environmental, and social aspects of a business, which cannot be easily quantified in monetary terms.

Employee Turnover

The rate at which employees leave a company and are replaced by new employees.