Which of the Following Is an Exception Report That the Auditor

question 7

Multiple Choice

Which of the following is an exception report that the auditor would generate using generalised audit software in order to test the valuation and allocation assertion for accounts receivable?

• A)Adding the accounts receivable ledger, and checking the total to the accounts receivable balance in the general ledger.
• B)A sequence check looking for missing sales invoice numbers.
• C)A report outlining those balances that are greater than three months overdue.
• D)A sample of debtors to be confirmed by positive debtors' confirmation procedures.

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Definitions:

Unadjusted Trial Balance

A preliminary report that lists all the balances of a company's accounts before making any adjusting entries.

Post-Closing Trial Balance

A list of all the account balances of a business after closing entries for the accounting period have been made, ensuring the accounts are ready for the next period.

Financial Statements

Comprehensive reports created to communicate the financial performance, position, and cash flows of a business to external and internal stakeholders.

Adjusting Entries

Accounting records entries recorded at the conclusion of an accounting cycle to apportion revenues and expenditures to the time period they truly took place.