One of the most important test of details of balances for accounts receivable is
A)recalculation of the aged receivables and uncollectible accounts.
B)confirmations.
C)tracing from shipping documents to journals to the accounts receivable ledger.
D)tracing credit memos for returned merchandise to receiving room reports.

Question

Quizplus · Accepted Answer

Confirmations are an important test for accounts receivable as they provide external verification of the balances. This involves sending letters to customers requesting them to confirm the amounts they owe to the company. This helps to identify any discrepancies or errors in the accounts, and also provides assurance about the collectability of the balances. Recalculation of aged receivables and tracing from shipping documents to journals and the accounts receivable ledger are also important tests, but they do not provide the same level of external verification as confirmations. Tracing credit memos for returned merchandise to receiving room reports is a test of the completeness of the accounts, rather than the accuracy of the balances.

One of the Most Important Test of Details of Balances