Audit documentation often includes a client-prepared,aged trial balance of accounts receivable as of the balance sheet date.The audit team uses this aging primarily to
A) Evaluate internal control over credit sales.
B) Test the accuracy of recorded charge sales.
C) Estimate credit losses.
D) Verify the existence of the recorded receivables.

Question

Quizplus · Accepted Answer

An aged trial balance of accounts receivable can help the audit team estimate credit losses by categorizing accounts by the length of time they have been outstanding. This allows the team to identify accounts that are past due and assess the likelihood that they may become uncollectible. The other options presented are not the primary use of an aged trial balance in the audit process.

Audit Documentation Often Includes a Client-Prepared,aged Trial Balance of Accounts