To test for recorded sales for which there were no actual shipments, the auditor vouches from the
A) bill of lading to the sales journal.
B) sales journal to the shipping documents.
C) sales journal to the accounts receivable subsidiary ledger.
D) bill of lading to the supporting customer order and sales order.

Question

Quizplus · Accepted Answer

By vouching from the sales journal to the shipping documents, the auditor can verify that the recorded sales actually had corresponding shipments. This will help identify any instances of recording sales without actually fulfilling the orders, which could potentially inflate the company's reported revenue. Vouching from the bill of lading to the sales journal or accounts receivable subsidiary ledger may not provide as direct a link between recorded sales and actual shipments. Vouching from the supporting customer order and sales order may be helpful in confirming the accuracy of the recorded sales, but may not specifically identify cases of recorded sales without shipments.

To Test for Recorded Sales for Which There Were No