B is corrent because tracing from accounting records to source documents tests for overstatements (the existence assertion). For example, an auditor might trace from the sales journal to support such as sales invoices, shipping documents and customers’ orders.
A is incorrect because tracing from the sales journal to the cash receipts journal will only address whether cash has been received on recorded credit sales. Note, however, that this procedure could detect overstatements of sales in that one would not expect a cash receipt for a recorded sale that is not proper.
C is incorrect because tracing from the cash receipts journal to the sales journal will address whether a recorded sale exists for each cash receipt.
D is incorrect because tracing from source documents to the accounting records will primarily address understatements of sales, not overstatements (that is, it will test completeness).
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