The use of the negative (as opposed to the positive)form of receivables confirmation is indicated when
A)internal control surrounding accounts receivable is considered to be ineffective.
B)there is reason to believe that a substantial number of accounts may be in dispute.
C)a large number of small balances are involved.
D)accounts receivable consists of current balances only.

Question

Quizplus · Accepted Answer

The negative form of receivables confirmation is typically used when there are a large number of small balances involved. This is because it is not practical to expect a response unless the customer disagrees with the stated amount, making it efficient for confirming many accounts with small balances.

The Use of the Negative (As Opposed to the Positive)form