Which of the Following Might Be Detected by an Auditor's

question 18

Multiple Choice

Which of the following might be detected by an auditor's review of the entity's sales cutoff?

• A)Excessive goods returned for credit.
• B)Unrecorded sales discounts.
• C)Lapping of year-end accounts receivable.
• D)Overstated sales for the year.

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Definitions:

Other Income

Income derived from sources other than a company's primary business operations, such as interest or rental income.

Revenue

The total amount of money received by a company for goods sold or services provided during a certain period.

Record Payments

The process of documenting all money transfers made to settle debts or for purchases in the accounting records of a company.

Perpetual Inventory Method

An accounting method for maintaining continuous records of inventory balances, with updates made for each purchase and sale transaction.