The most effective audit procedure for determining the collectability of an account receivable is the
A) Review of the subsequent cash collections.
B) Examination of the related sales invoice(s).
C) Confirmation of the account.
D) Review of authorization of credit sales to the customer and the previous history of collections.

Question

Quizplus · Accepted Answer

Reviewing subsequent cash collections provides direct evidence of the collectability of an account receivable, as it shows whether the customer has actually paid the amount owed.

The Most Effective Audit Procedure for Determining the Collectability of an Account