When Positive Confirmations Are Used, Auditing Standards Require Alternative Procedures

question 29

Multiple Choice

When positive confirmations are used, auditing standards require alternative procedures for confirmations not returned by the customer.Which of the following would not be considered an alternative procedure?

• A)Send a second confirmation request.
• B)Examine subsequent cash receipts to determine if the receivable has been paid.
• C)Examine shipping documents to verify that the merchandise was shipped.
• D)Examine customer's purchase order and the duplicate sales invoice to determine that the merchandise was ordered.

---

Definitions:

Credit Sales

Deals in which a customer receives goods or services with the understanding that they will pay for them at a future time.

Sales Journal

A specialized journal used to record and track all sales of merchandise on credit, centralizing sales data for easier management.

Accounts Payable Control

A system or method used to manage and track the money owed by the company to its creditors or suppliers.

Subsidiary Ledger

A detailed ledger that contains the details to support a main ledger account, such as accounts receivable or accounts payable.