Which of the following is a substantive test of the trade receivables balance that is always performed?
A) testing the accounting classification of sales transactions
B) testing the mathematical accuracy of the cash receipts ledger
C) evaluating the adequacy of the provision for doubtful accounts
D) none of the above

Question

Quizplus · Accepted Answer

Evaluating the adequacy of the provision for doubtful accounts is always performed as it is a key control over the trade receivables balance. This test is essential in ensuring that the company has accurately estimated the amount of potential bad debts and has made adequate provisions for these debts in the financial statements.

Which of the Following Is a Substantive Test of the Trade