Question

Which of the following statements will an auditor most likely add to the negative from of confirmations of accounts receivable to encourage timely consideration by the recipient?
A. "This is not a request for payment; remittances should not be sent to our auditors in the enclosed envelope"
B. "Report any differences on the enclosed statement directly to our auditors; no reply is necessary if this amount agrees with your records"
C. "If you do not report any differences with 15 days, it will be assumed that this statement is correct"
D. "The following invoices have been selected for confirmation and represent amounts that are overdue"

Answer 1

Answer:

The correct answer is letter "C": "If you do not report any differences with 15 days, it will be assumed that this statement is correct".

Explanation:

Accounts Receivable, or AR, is an accounting term used to refer to the money that is owed to a company by its customers. The customers, who may be individuals or corporations, are the debtors since they owe money for the goods or services provided by the company. When the product is sold in credit the company sets a number of days so that the customer can pay the bill amount. The term usually is 30, 60 or 90 days.

In that sense, and auditor may find 15 days suitable for a debtor for report changes in a statement, otherwise, it is considered as correct.