The Audit Procedure That Provides the Auditor with the Most

question 86

Multiple Choice

The audit procedure that provides the auditor with the most appropriate evidence when performing test of details of balances for accounts receivable is

• A) confirmations.
• B) recalculation of the aged receivables and uncollectible accounts.
• C) tracing credit memos for returned merchandise to receiving room reports.
• D) tracing from shipping documents to journals to the accounts receivable ledger.

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Definitions:

Balance Sheet Accounts

Balance Sheet Accounts are the accounts that reflect the assets, liabilities, and equity of a company as recorded on the balance sheet, giving a snapshot of financial health at a specific point in time.

Current Assets

Liquid assets that a company owns and expects to use or convert into cash within a year or its operational cycle.

Cash

A company's currency or assets that can be immediately used for transactions or payments.

Supplies

Items that are used in the day-to-day operations of a business, often categorized as a current asset on the balance sheet.