Whitehall Company records its liabilities in an accounts payable subsidiary ledger. The auditors have decided to select

Question:

Whitehall Company records its liabilities in an subsidiary ledger. The auditors have decided to select some of the accounts for confirmation by direct communication with vendors. The largest volume of purchases during the year has been made from Ranchero Company, but at the date this account has a zero balance. Under these circumstances, should the auditors send a confirmation request to Ranchero Company, or would they accomplish more by limiting their confirmation program to accounts with larger year-end balances?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...