The most important test of details of balances for accounts receivable is:
A) obtaining confirmations from the client's customers.
B) tracing from shipping documents to journals to the accounts receivable ledger.
C) tracing credit memos for returned merchandise to receiving room reports.
D) recalculating the aged receivables and uncollectible accounts.

Question

Quizplus · Accepted Answer

Obtaining confirmations from the client's customers is the most important test of details of balances for accounts receivable because it provides independent verification of the accuracy and completeness of the accounts receivable balances. Tracing from shipping documents or credit memos can also provide important evidence, but they are not as reliable as customer confirmations. Recalculating aged receivables and uncollectible accounts is a substantive test, but it does not specifically address the accuracy of the account balances.

The Most Important Test of Details of Balances for Accounts