Most tests of accounts receivable and the allowance for uncollectible accounts are based on the:
A) results of analytical procedures.
B) results of confirmations.
C) aged trial balance.
D) general ledger balance of each account.

Question

Quizplus · Accepted Answer

The aged trial balance provides detailed information on each customer's outstanding balance, the length of time the balance has been outstanding, and the amount that is considered uncollectible. This information is crucial in determining the adequacy of the allowance for uncollectible accounts. Analytical procedures and confirmations may also be used, but the aged trial balance is typically the primary source of information for testing accounts receivable and the allowance. The general ledger balance of each account is not sufficient for testing purposes because it does not provide detailed information on individual customer balances.

Most Tests of Accounts Receivable and the Allowance for Uncollectible