The Auditor Is Concerned That a Client Is Failing to Bill

question 42

Multiple Choice

The auditor is concerned that a client is failing to bill customers for shipments.An audit procedure that would gather relevant evidence would be to:

• A) compare the total of the schedule of accounts receivable with the balance of the accounts receivable account in the general ledger.
• B) trace a sample of sales journal entries to the accounts receivable subsidiary ledger.
• C) trace a sample of shipping documents to related duplicate sales invoices.
• D) select a sample of duplicate sales invoices and trace each to related shipping documents.

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Definitions:

Diazomethane

A highly reactive, yellow, toxic gas with the formula CH2N2, used in organic synthesis to introduce a methyl group.

Zwitterionic

A chemical compound that is electrically neutral overall but contains positively and negatively charged sites at different atoms within the molecule.

Carbene

A highly reactive molecule featuring a carbon atom with two nonbonded electrons and is bonded to only two other atoms.

Resonance Structures

Different Lewis structures of a molecule or ion that depict the same connectivity but differ in the placement of electrons, contributing to the real structure.