When a Customer Disagrees with the Amount Shown on an Accounts

question 56

True/False

When a customer disagrees with the amount shown on an accounts receivable confirmation, the auditor should not ask the client to reconcile the difference.

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Definitions:

Inventory of Supplies

The total value of supplies held by a company that are yet to be used in production or sold.

Supplies Account

An account used to track the cost of supplies used by a business during an accounting period.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditure to the correct accounting periods, ensuring the financial statements are in accordance with the accrual basis of accounting.

Annual Accounting Period

A 12-month timeframe over which a company measures its financial performance and prepares financial statements.