1. We discussed a number of assertions about account balances, classes of transactions, and disclosures contained in financial statements. These assertions include existence and occurrence, rights and obligations, completeness, cutoff, valuation and disclosure. When we gather audit evidence, we gather evidence to support financial statement assertions.

Required:

1. Describe how each of these assertions relates to Accounts Receivable.
2. Chase & Evan, CPAs are the auditors for Mojito, Inc. In the course of the audit, Chase & Evan select a sample of Mojitos customers from the Accounts Receivable subsidiary ledger and send letters to them asking for confirmation of the Accounts Receivable balances owed to Mojito, Inc. Describe which of the assertions will be supported by the evidence obtained from the confirmations sent to Mojitos customers. Explain how the evidence supports the assertion and, if it does not support the assertion, why not.