Which of the following responses to an accounts receivable confirmation at December 31 would cause an audit team the most concern? A)"This amount was paid on December 30^th." B)"We received this shipment on January 2^nd." C)"These goods were returned for credit on November 15^th." D)"The balance does not reflect our sales discount for paying by January 5^th."

Question

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The response indicating goods were returned for credit on November 15th would cause the most concern because it suggests that the accounts receivable balance might be overstated if the return has not been properly accounted for by the audit date.

Which of the Following Responses to an Accounts Receivable Confirmation