In which of the following circumstances would the use of the negative form of accounts receivable confirmation most likely be justified?
A)A substantial number of accounts may be in dispute and the accounts receivable balance arises from sales to a few major customers.
B)A substantial number of accounts may be in dispute and the accounts receivable balance arises from sales to many customers with small balances.
C)A small number of accounts may be in dispute and the accounts receivable balance arises from sales to a few major customers.
D)A small number of accounts may be in dispute and the accounts receivable balance arises from sales to many customers with small balances.

Question

Quizplus · Accepted Answer

Negative confirmations are more effective when there are many small balances and a low risk of material misstatement, as they assume that recipients will respond only if they disagree with the stated amount.

In Which of the Following Circumstances Would the Use of the Negative