Your review of notes receivable from officers, directors, stockholders, and affiliated companies discloses that several notes of small amounts were written off to the allowance for uncollectible notes during the year. Have these transactions any special significance? Explain.
Answer to relevant QuestionsState briefly the audit objectives that are addressed by the following audit procedure: “Confirm accounts receivable and notes receivable by direct communication with debtors.”In connection with an audit, what are the purposes of a review of sales returns and allowances subsequent to the balance sheet date?An assistant auditor was instructed to “test the aging of accounts receivable as shown on the trial balance prepared by the client.” In making this test, the assistant traced all past-due accounts shown on the trial ...The following are typical questions that might appear on an internal control questionnaire for accounts receivable:1. Are sales invoices checked for proper pricing, terms, and clerical accuracy?2. Are shipping documents ...Criticize the following quotation: “A credit memorandum should be issued only when an account receivable is determined to be uncollectible.”
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