| Aged trial balance | A listing of individual customers' accounts classified by the number of days subsequent to billing, that is, by age. A preliminary step in estimating the collectibility of accounts receivable.
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| Bill and hold transactions | Transactions in which sales of merchandise are billed to customers prior to delivery, with the goods being held by the seller. These transactions may overstate revenues and net income if they do not meet specific requirements for recognition as sales.
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| Channel stuffing | A marketing practice that suppliers sometimes use to boost sales by inducing customers to buy substantially more inventory than they can promptly resell. Channel stuffing without appropriate provision for sales returns is an example of booking tomorrow's revenue today in order to window dress the financial statements.
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| Confirmation | The process of obtaining evidence by written communication with the debtor or other party to a transaction.
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| Interim audit work | Those audit procedures that can be performed before the balance sheet date. The purpose is to facilitate earlier issuance of the audit report and to spread the auditors'work more uniformly over the year.
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| Negative confirmation | A confirmation request addressed to the debtor requesting a reply only if the balance shown on the confirmation is incorrect.
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| Pledging of receivables | To assign to a bank, factor, finance company, or other lender an exclusive claim against accounts receivable as security for a debt.
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| Positive confirmation | A confirmation request sent to the debtor asking it to confirm directly to the auditors the accuracy of the dollar amount shown on the request. Calls for a reply regardless of whether the amount is correct or incorrect.
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| Side agreements | Formal or informal modifications of normal terms and conditions of sales transactions to entice customers to accept delivery of goods or services.
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| Window dressing | Action taken by the client shortly before the balance sheet date to improve the financial picture presented in the financial statements.
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