Question

1. A customer responds to an accounts receivable with the following statement "Item was not received until for on January 5". What alternative procedure might the auditor perform in order to conclude the amount was a valid receivable as of December 31, despite what the customer stated?

Group of answer choices

A. Examine cash receipts journal to verify payment was received after year end.

B. Inspect shipping documents to verify goods were shipped prior to year end.

C. Inspect shipping documents to verify goods were shipped after year end.

D. Examine cash receipts journal to verify payment was received prior to year end.

2. For a client that has a December 31 year end, for which of the following accounts receivable confirmation responses would an auditor NOT have to perform any alternative procedures?

Group of answer choices

A. Amount was fully paid on January 7.  

B. Shipment was returned on January 7.  

C. Amount was fully paid on December 28.

D. Shipment was returned on December 28.

Answer 1

1. A customer responds to an accounts receivable with the following statement "Item was not received until for on January 5". What alternative procedure might the auditor perform in order to conclude the amount was a valid receivable as of December 31, despite what the customer stated?

Answer C. Inspect shipping documents to verify goods were shipped after year end.

2. For a client that has a December 31 year end, for which of the following accounts receivable confirmation responses would an auditor NOT have to perform any alternative procedures?

Answer C. Amount was fully paid on December 28.