An aged trial balance of accounts receivable is normally used by the auditor to
A) Verify the existence of recorded receivables.
B) Ensure that all accounts are promptly credited.
C) Evaluate the results of tests of controls.
D) Evaluate the provision for bad debts.

Question

Quizplus · Accepted Answer

An aged trial balance of accounts receivable is used by the auditor to evaluate the provision for bad debts. The auditor can use the aging analysis to assess the collectability of individual accounts and apply an appropriate provision for bad debts based on the level of risk. The other options are not related to the purpose of an aged trial balance. Verification of existence of recorded receivables is done through confirmation procedures, not an aged trial balance. Prompt crediting of accounts would be evaluated through tests of controls, not an aged trial balance.

An Aged Trial Balance of Accounts Receivable Is Normally Used