A Comparison of Checks Listed on a Sample of Deposit

question 43

True/False

A comparison of checks listed on a sample of deposit slips to the detail of customer credits posted to customer accounts receivable can be an audit test for lapping.
Question also found in study guide

---

Definitions:

Direct Write-off Method

A method of accounting for bad debts that involves charging unpaid customer accounts directly to expense once they are deemed to be uncollectible.

Percent of Sales

A financial ratio that compares various financial metrics as a percentage of total sales, used to analyze operational efficiency and profitability.

Securitization Entities

Specialized entities created to pool various financial assets and sell them as securities to investors.

Balance Sheet

A financial statement that presents a company's assets, liabilities, and stockholders' equity at a specific point in time.