For Most Audits, a Proper Cash Receipts Cutoff Is Less

question 117

True/False

For most audits, a proper cash receipts cutoff is less important than either the sales or the sales returns and allowances cutoff since cash only affects the balance sheet, and not earnings.

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Definitions:

Payment Bond

A type of surety bond that guarantees the payment of subcontractors, laborers, and suppliers on construction projects.

Liens

Legal claims or rights against property or assets that secure the payment of a debt or fulfillment of some obligation.

Suppliers

Entities that provide goods or services to another entity, typically in a business-to-business relationship.

Canceling

involves terminating an agreement, order, or subscription, effectively ending an arrangement or contract.