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 directly addresses the collectability of an account receivable by providing evidence that the receivable has been or can be converted into cash, which is the ultimate test of its collectability.

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