To Test for Proper Sales Cutoff, an Auditor Would Obtain

question 103

True/False

To test for proper sales cutoff, an auditor would obtain the number of the last bill of lading issued during the period under audit and verify that the item shipped had been excluded from the inventory listing.

---

Definitions:

Gain

A financial increase resulting from a transaction that exceeds the costs or purchase prices of the assets sold, not related to the primary operations.

Long-Term

Refers to holding or affecting a period extending over a long duration, typically beyond one year.

Investments

Financial assets acquired for income generation or capital appreciation.

Cash Equivalents

Short-term, highly liquid investments that are easily convertible to a known amount of cash and close to their maturity.