An Auditor's Analysis of Specific Accounts Receivable and Recent Trends

question 4

Multiple Choice

An auditor's analysis of specific accounts receivable and recent trends in bad debt losses as a percent of sales may cause the auditor to conclude that the allowance for doubtful accounts should be between $130,000 and $160,000.If management's recorded estimate falls within that range,the auditor ordinarily would conclude that the recorded amount is reasonable,and no difference would be aggregated.If management's recorded estimate is $110,000,how much would be aggregated as a misstatement?

• A)$0.
• B)$30,000.
• C)$20,000.
• D)$110,000.