As a Control for the Assertion of Cutoff of Cash

question 61

Multiple Choice

As a control for the assertion of cutoff of cash receipts, a daily exception report is generated for which of the following?

• A)Any cash receipts recorded in the incorrect time period
• B)Any recorded values of cash received not supported by an underlying remittance report
• C)Any recorded cash receipts not supported by the bank remittance report
• D)Any cash receipts posted to the incorrect customer

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Definitions:

Convertible Bonds

Bonds eligible for conversion into a specific quantity of a company's stock at various points throughout their tenure, typically at the option of the holder.

GAAP

Generally Accepted Accounting Principles; refers to the framework of guidelines for financial accounting used in any given jurisdiction; commonly serves as the standard for financial reporting.

Compound Instruments

Financial instruments that contain both a liability and equity element, requiring separation for accounting purposes.

Liability

A financial obligation or debt owed by a company to another entity, payable in the future.