For sales, the existence transaction-related objective affects the existence balance-related objective for accounts receivable, but for cash receipts, the existence transaction-related objective affects the completeness balance-related objective for accounts receivable.

Question

Quizplus · Accepted Answer

The existence transaction-related objective for sales ensures that recorded sales transactions actually occurred and thus supports the existence of related accounts receivable balances. For cash receipts, ensuring that all cash receipts transactions are recorded (completeness) affects the completeness of the accounts receivable balance, as it ensures all payments received are recorded and applied against the correct customer balances.

For Sales, the Existence Transaction-Related Objective Affects the Existence Balance-Related