In Determining Whether Transactions Have Been Recorded, the Direction of the Audit

question 47

Multiple Choice

In determining whether transactions have been recorded, the direction of the audit testing should start from the:

• A)general ledger balances.
• B)adjusted trial balance.
• C)original source documents.
• D)general journal entries.

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Definitions:

Uncollectible Accounts Expense

Expenses related to uncollectible amounts from credit sales.

Allowance Account

A contra account that reduces the total amount of accounts receivable on the balance sheet to reflect uncollectible amounts.

Accounts Receivable

Amounts owed to a company by customers for goods or services provided on credit.

Uncollectible Accounts

Accounts receivable that a company has deemed uncollectible from debtors, leading to their classification as bad debts.