The most important test for the existence/occurrence objective for accounts receivable is:
A) internal control over balances confirmed.
B) ownership of the balances confirmed.
C) existence of the balances confirmed.
D) collectability of the balances confirmed.

Question

Quizplus · Accepted Answer

The most important test for the existence/occurrence objective for accounts receivable is to confirm that the balances actually exist by verifying them with customers. This can be done through direct communication or through third-party confirmations. Internal control over balances (A) is important, but it doesn't test for existence. Ownership (B) and collectability (D) are also important, but they are not as crucial as existence/occurrence because if the balances don't exist, the other two objectives are irrelevant.

The Most Important Test for the Existence/occurrence Objective for Accounts