Cutoff Tests Designed to Detect Purchases Made Before the End

question 49

Multiple Choice

Cutoff tests designed to detect purchases made before the end of the year that have been recorded in the subsequent year most likely would provide assurance about management's assertion of

• A)valuation or allocation.
• B)existence or occurrence.
• C)completeness.
• D)rights and obligations.

---

Definitions:

Government Securities

Financial instruments issued by a government to finance its projects and operations, commonly involving debt securities like bonds.

Interest Rates

The segment of a loan assessed as interest for the borrower, traditionally displayed as a yearly percentage of the loan's outstanding amount.

Tight Money Policy

A monetary policy that makes borrowing money more expensive and less accessible in order to reduce inflation.

Interest Rates

The proportion of interest a borrower is charged for loaned funds.