The Purchases Cutoff Test Involves Determining That _______

question 124

Multiple Choice

The purchases cutoff test involves determining that _______.

• A)purchase transactions occurring near the balance sheet date are recorded in the proper period
• B)sales transactions occurring near the balance sheet date are recorded in the proper period
• C)purchase transactions occurring near the balance sheet date are recorded at the correct amounts
• D)sales and purchasing transactions occurring after the balance sheet date are recorded at the correct amounts

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Definitions:

Bottom Line

In finance, it refers to the net income or profit of a business after all expenses have been deducted from revenues. In general use, it means the final outcome or conclusion.

Net Income

The total profit of a company after all expenses and taxes have been deducted from its total revenue.

Assets and Liabilities

Assets are resources owned by a business or individual offering future economic benefits, while liabilities are obligations that deplete resources.

Financial Position

Financial position refers to the status of a company's assets, liabilities, and equity at a specific point in time, as represented in the balance sheet.