In evaluating the adequacy of the allowance for doubtful accounts, an auditor is most likely to review the aging of receivables as evidence and support for management's financial statement assertion of ________.

Question

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The aging of receivables is a common method used to assess the adequacy of the allowance for doubtful accounts. This provides evidence for management's valuation or allocation assertion, which is related to whether the financial statements are fairly stated in terms of amount, classification, and timing. Checking the aging of receivables is an essential part of the auditor's assessment in determining the amount of the allowance for doubtful accounts necessary to reduce the accounts receivable balance to its net realizable value.

In Evaluating the Adequacy of the Allowance for Doubtful Accounts