The most important test of details of balances to determine the existence of recorded accounts receivable is:
A) the confirmation of customers' balances.
B) tracing sales returns entries to credit notes issued and receiving room reports.
C) tracing sales entries to shipping documents.
D) tracing the credits in accounts receivable to bank deposits.

Question

Quizplus · Accepted Answer

The confirmation of customers' balances is the most important test to determine the existence of recorded accounts receivable because it confirms that the balances listed in the accounts receivable ledger are indeed owed by customers. This test provides external evidence of the existence of the receivables and helps to identify any discrepancies or errors in the accounts. Tracing sales returns, sales entries, or credits in accounts receivable to other documents can provide additional evidence of the existence of receivables, but confirmation remains the most important test.

The Most Important Test of Details of Balances to Determine