The most important test of details of balances to determine the existence of recorded accounts receivable is:
A) tracing the credits in accounts receivable to bank deposits.
B) tracing sales returns entries to credit notes issued and receiving room reports.
C) the confirmation of customers' balances.
D) tracing sales entries to shipping documents.

Question

Quizplus · Accepted Answer

The confirmation of customers' balances involves reaching out to customers directly to verify the amount that they owe to the company. This is the most direct and reliable way to determine the existence of recorded accounts receivable. The other options (tracing credits to bank deposits, tracing sales returns entries, tracing sales entries to shipping documents) can help to identify possible discrepancies or errors, but do not provide as strong of an indication that the accounts receivable actually exist.

The Most Important Test of Details of Balances to Determine