ACY52 Substantive Test of Receivables and Sales Quiz

The department approving a sales transaction should be the shipping department.

• TRUE
• FALSE

Accounts receivable that are written-off should not be turned over to a collection agency.

• TRUE
• FALSE

An aged trial balance of accounts receivable may provide evidence on the adequacy of the allowance foruncollectible accounts.

• TRUE
• FALSE

Confirmation of accounts receivable by direct communication with the debtor tests the existence of accounts receivable.

• TRUE
• FALSE

Confirmation requests should contain a "business reply" envelope addressed to the auditors at the client's address.

• TRUE
• FALSE

CPAs use negative accounts receivable confirmation requests more frequently than positive accounts receivable confirmation requests.

• TRUE
• FALSE

Confirmation of accounts receivable provides some assurance that no lapping or other manipulation affecting accounts receivable is being carried on.

• TRUE
• FALSE

Analytical procedures are used by auditors to gain evidence about the adequacy of the allowance for uncollectible accounts.

• TRUE
• FALSE

When it is impossible to confirm accounts receivable, the auditors may be able to satisfy themselves as to the existence of accounts receivable by alternative procedures.

• TRUE
• FALSE

Material accounts receivable from related parties should be stated separately from other receivables.

• TRUE
• FALSE