Question

Which of the following represents the most competent evidence that trade receivables actually exist?

1) Sales invoices
2) Purchase orders
3) Bank statements
4) Customer complaints

Answer 1

Sales invoices represent the most competent evidence that trade receivables actually exist.

Step-by-step explanation:

The most competent evidence that trade receivables actually exist is sales invoices. Sales invoices provide detailed information about the goods or services sold, including the customer's name, amount owed, and payment terms. By examining sales invoices, a company can verify the existence of trade receivables and ensure that they are properly recorded.

Purchase orders, on the other hand, represent a buyer's intent to purchase goods or services and do not provide direct evidence of the existence of trade receivables.

Bank statements only show the cash inflows and outflows from the company's bank account and do not directly confirm the existence of trade receivables. Similarly, customer complaints may indicate issues with the quality or delivery of goods but do not serve as direct evidence of the existence of trade receivables.

Therefore the correct answer is 1) Sales invoices.