Choice "A" is correct. Detecting a possible understatement in sales is tantamount to testing completeness (i.e., if an understatement is found, sales are not complete). To test completeness, one needs to start with supporting documentation, such as shipping documents, and trace forward to recording in the accounting records, such as the sales invoices and sales journal. Should the auditor find a shipping document for which there is no entry in the sales journal, an understatement error (or a completeness problem) will have been discovered.
Choice "c" is incorrect. Tracing from the accounting records, such as sales invoices, to supporting documentation, such as shipping documents, tests for overstatement, or tests existence. Should the auditor find a sales invoice for which there is no shipping document, an overstatement error will have been discovered (i.e., perhaps a fictitious sale has been recorded).
Choice "b" is incorrect. Tracing from the cash receipts journal to the sales journal may help the auditor verify whether the receipt was properly recorded (i.e., once one knows to which sale the receipt relates, one can verify whether the appropriate customer balance was reduced), but it does not aid the auditor in detecting possible understatements of sales. In order to detect understatements, one must trace from supporting documentation to accounting records, not compare internal consistency among accounting records.
Choice "d" is incorrect. Tracing from the sales journal to the cash receipts journal aids the auditor in identifying sales for which payment has not yet been received, but it does not aid the auditor in detecting possible understatements of sales. In order to detect understatements, one must trace from supporting documentation to accounting records, not compare internal consistency among accounting records.