Question

An aged trial balance of accounts receivable is normally used by the auditor to

a. Verify the existence of recorded receivables.
b. Ensure that all accounts are promptly credited.
c. Evaluate the results of tests of controls.
d. Evaluate the provision for bad debts.

Answer 1

An aged trial balance of accounts receivable is used by the auditor to evaluate the provision for bad debts.

Step-by-step explanation:

An aged trial balance of accounts receivable is used by the auditor to evaluate the provision for bad debts. The aged trial balance provides a breakdown of the outstanding receivables by age categories, allowing the auditor to assess the likelihood of collectability. By analyzing the aging of accounts receivable, the auditor can determine if the provision for bad debts is adequate or if adjustments need to be made.