Existence of trade receivables is usually verified by:
A)calculating changes in the receivables balance from one year to the next.
B)examining copies of sales invoice sent to the client's customers.
C)sending confirmations to the client's customers.
D)evaluating the adequacy of the provision for doubtful debts.

Question

Quizplus · Accepted Answer

The most reliable way to verify the existence of trade receivables is to send confirmations directly to the client's customers, asking them to confirm the amount they owe to the client. This provides independent verification of the balance of trade receivables and can help to detect any errors or fraud. Options A and D are not specifically related to verifying the existence of trade receivables, while option B only provides evidence of sales being made, but does not confirm whether the receivables are still outstanding.

Existence of Trade Receivables Is Usually Verified By