The auditor determines that each of the following objectives will be part of the company's audit. For each objective, click on the associated cell and select two different substantive tests that provide the best support for the audit objective. A substantive test may be used once, more than once, or not at all.

Audit objective Substantive tests

1. Receivables at the end of year 2 are properly cutoff with respect to sales made in year 2.

2. The aggregate of net receivables in the balance sheet is fairly stated at estimated net realizable value.

Selection List:

A. Request positive confirmation directly from the customer of its balance owed to the company.

B. Test that the income statement agrees to the change of assets minus liabilities and owner's equity.

C. Test the aging in the accounts receivable trial balance.

D. Trace shipping documents to the related sales invoices and orders, and to entries in the sales journal and accounts receivable subsidiary ledger.

E. Analyze the historical relationship of bad-debt write-offs in comparison with sales and accounts receivable.

F. Foot the accounts receivable trial balance.

G. Foot and crossfoot the sales journal.

H. Identify the last number used in year 2 and the first number used in year 3 for pre-numbered shipping documents and pre-numbered sales invoices. Trace the respective numbers to postings in the sales journal and accounts receivable subsidiary ledger.

TBSACO0066 1. TBSAC00066 Substantive Tests The auditor determines that each of the following objectives will be part of the company's audit. For each objective, click on the associated cell and select two different substantive tests that provide the best support for the audit objective. A substantive test may be used once, more than once, or not at all. Audit objective Substantive tests 1. Receivables at the end of year 2 are properly cutoff with respect to sales made in year 2. 2. The aggregate of net receivables in the balance sheet is fairly stated at estimated net realizable value. Selection List B. Test that the income statement agrees to the change of assets minus liabilities and owner's equity. A. Request positive confirmation directly from the customer of its balance owed to the company. C. Test the aging in the accounts receivable trial balance. D. Trace shipping documents to the related sales invoices and orders, and to entries in the sales journal and accounts receivable subsidiary ledger. E. Analyze the historical relationship of bad-debt write-offs in comparison with sales and accounts receivable. F. Foot the accounts receivable trial balance. G. Foot and crossfoot the sales journal. H. Identify the last number used in year 2 and the first number used in year 3 for pre- numbered shipping documents and pre-numbered sales invoices. Trace the respective numbers to postings in the sales journal and accounts receivable subsidiary ledger