When an Auditor Tests to Determine If All Existing Accounts

question 24

Multiple Choice

When an auditor tests to determine if all existing accounts receivable are included in the aged trial balance,

• A) they cannot rely on the self-balancing nature of the accounts receivable master file.
• B) if all sales to a customer are omitted from the sales journal, it is easy to uncover the understatement of accounts receivable by tests of details of balances.
• C) auditors rarely send accounts receivable confirmations to customers with zero balances.
• D) unrecorded sales to a new customer are easy to identify for confirmation because that customer is included in the accounts receivable master file.

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Definitions:

Carboxylate Ion

A negatively charged ion (an anion) that results when a carboxylic acid loses a hydrogen ion from its carboxyl group.

Ether Solution

A solution in which an ether, a class of organic compounds containing an oxygen atom connected to two alkyl or aryl groups, serves as the solvent.

Aqueous NaOH

A solution of sodium hydroxide in water, commonly used as a strong base in chemical reactions and industrial processes.

pKa

A quantitative measure of the strength of an acid in solution, defined as the negative logarithm of its acid dissociation constant.