Detail tests of balances for debt include:
A) sending confirmations to creditors requesting information concerning outstanding debt.
B) a search of activity subsequent to year-end for any payments linked to debt that was not disclosed.
C) a search of the cash receipts journal for amounts received relating to new debt.
D) All of the above.

Question

Quizplus · Accepted Answer

All of the above tests are relevant and important for testing the balances for debt. Sending confirmations to creditors will help in verifying the existence and completeness of outstanding debt balances. A search of activity subsequent to year-end will help in detecting any payments linked to debt that was not disclosed. Similarly, a search of the cash receipts journal will help in identifying any amounts received relating to new debt which could affect the balances for debt. Therefore, all three tests are integral to evaluating the accuracy of balances for debt.

Detail Tests of Balances for Debt Include