Which of the following would provide the most assurance

concerning the valuation of accounts receivable? False

Inquiry to the client's credit manager is the procedure that
Select one: most auditors perform when performing the audit of
a. Inquire about receivables pledged under loan allowance for doubtful accounts.
agreements.
Select one:
b. Trace amounts in the accounts receivable subsidiary
True
ledger to details on shipping documents.
c. Assess the allowance for uncollectible accounts for False
reasonableness. Which of the following most likely would be detected by a
review of a client's sales cutoff?
d. Compare receivable turnover ratios to industry statistics
for reasonableness. Select one:
Gold Corporation sells a variety of imported goods. By a. Lapping of year-end accounts receivable.
selling on credit, Gold cannot expect to collect 100% of its
accounts receivable. At December 31, 2017, Gold reported b. Excessive sales discounts.
the following in its statement of financial position:
c. Unauthorized goods returned for credit.
Accounts receivable P    315,300
d. Unrecorded sales for the year.
Less: Allowance for bad
debts             (74,100) Sodium Trading estimates its uncollectible accounts to be
2% of the accounts receivable balance. The following
Accounts receivable, net P    241,200
information was taken from the company’s statement of
During the year ended December 31, 2018, Gold earned financial position at December 31, 2018:
sales revenue of P692,050 and collected cash of P578,030
from customers. Assume bad debt expense for the year   Debit Credit
was 1% of sales revenue and that Gold wrote off
     
uncollectible accounts receivable totaling P40,320.
Net sales (including cash sales 2,590,00
What is the accounts receivable balance at December 31, of P750,000) 0
2018?  
          
Select one: Allowance for bad debts 24,000  
a. P389,000      
b. P382,080 1,860,00
Accounts receivable 0  
c. P314,900
What is the bad debt expense to be reported for 2018?
d. P348,300
Select one:
Cutoff misstatements can occur for sales but not for sales
returns and allowances. a. P31,800

Select one: b. P24,000

True c. P55,800

False d. P79,800

Confirmation is the most common test of details of When a customer disagrees with the amount shown on an
balances for the accuracy of accounts receivable. account receivable confirmation, the auditor should not
ask the client to reconcile the difference.
Select one:
Select one:
True
True

False