Question

Assume that an organization asserts that it has $35 million in net accounts receivable. For which of the following is management correctly asserting with respect to net accounts receivable? a. There are no presentation and disclosure assertions. b. There are no management assertions that the organization owns the receivables and that they have not been sold, pledged, etc. c. There are no valuation or allocation assertions. d. The recorded accounts receivable exist at the balance sheet date and relate to valid sales.

Answer 1

d. The recorded accounts receivable exist at the balance sheet date and relate to valid sales.

Step-by-step explanation:

If the assumption is made that an organization asserts that it has $35 million in net accounts receivable,this implies that management is correctly asserting with respect to net accounts receivable that the recorded accounts receivable exist at the balance sheet date and relate to valid sales.

A net accounts receivable is a balance sheet item in the current asset section that represents a short-term asset showing the total amount due the company for goods sold on account after considering the amount known to be irrecoverable.