The Audit Working Papers Often Include a Client-Prepared,aged Trial Balance

question 54

Multiple Choice

The audit working papers often include a client-prepared,aged trial balance of accounts receivable as of the balance sheet date.This aging is best used by the auditors to:

• A)Consider internal control over credit sales.
• B)Test the accuracy of recorded charge sales.
• C)Estimate credit losses.
• D)Verify the validity of the recorded receivables.

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Definitions:

Significant Differences

Statistical evidence that two or more groups have values that are not likely to be the same purely by chance.

Two-Tailed Tests

Statistical tests that consider both directions of effect, allowing for the exploration of non-specific hypotheses.

One-Tailed Tests

Statistical hypothesis tests that determine the significance of an observed effect only in one direction, either greater than or less than a specified value.

Rejection Region

The portion of the sampling distribution of a statistic that leads to the rejection of the null hypothesis.