To Test for Recorded Sales for Which There Were No

question 129

Multiple Choice

To test for recorded sales for which there were no actual shipments,the auditor traces from the

• A)bill of lading to the sales journal.
• B)sales journal to the shipping documents.
• C)sales journal to the accounts receivable subsidiary ledger.
• D)bill of lading to the supporting customer order and sales order.

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Definitions:

Normal Balance

The side (debit or credit) of an account on which increases to the account are recorded, determined by the type of account.

Asset

Any resource owned or controlled by a business or an individual that is expected to produce value or benefit in the future.

Unearned Fees

Income received by a business for goods or services yet to be delivered or performed, considered a liability until the service or product is delivered.

Liability

A financial obligation or debt owed by a company or individual to another entity, payable in money, goods, or services.