During the Process of Confirming Receivables as of 30 June

question 70

Multiple Choice

During the process of confirming receivables as of 30 June 2012, a positive confirmation was returned indicating the 'balance owed as of 30 June was paid on 9 July 2012.' The auditor would most likely:

• A) determine whether a customary trade discount was taken by the customer.
• B) determine whether there were any changes in the account between 1 July and 9 July 2012.
• C) check subsequent cash receipts to confirm that the amount was received.
• D) reconfirm the zero balance as of 9 July 2012.

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Definitions:

Income Statement

A financial report that displays a company's revenues, expenses, and profits or losses over a specific period of time.

Commissions

Fees paid to salespersons or agents for facilitating sales, based on the value or volume of those sales.

Store Rent

The cost associated with leasing or renting a physical space for retail operations, recorded as an expense.

Operating Income

Operating income is the profit realized from a business's core operations, excluding costs and expenses related to financing and investment.