Question

In the accounts receivable subsidiary ledger the length of time the account has been due can be useful to the client and the auditor in preparing the:

A) trial balance.
B) working trial balance.
C) accounts receivable trial balance.
D) aged accounts receivable trial balance.

Answer 1

The length of time an account has been due is useful in preparing the aged accounts receivable trial balance.

Step-by-step explanation:

The correct answer is D) aged accounts receivable trial balance.

The accounts receivable subsidiary ledger keeps track of the individual accounts of customers who owe the company money. The length of time an account has been due, also known as its aging, is recorded in this ledger. The aged accounts receivable trial balance is a report that categorizes accounts by the length of time they have been due, such as 30 days, 60 days, 90 days, etc. This report is useful for both the client and the auditor in assessing the company's credit policies, identifying potential bad debts, and evaluating the overall health of the accounts receivable.