Tests Designed to Detect Credit Sales Made Before the End

question 36

Multiple Choice

Tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year provide assurance about management's assertion of:

• A)Classification.
• B)Cut-off.
• C)Occurrence.
• D)Accuracy.

Understand the financial implications of product discontinuation.

Analyze the benefits and drawbacks of alternative cost structures.

Determine the break-even point for new and existing products.

Evaluate the financial outcomes of upgrading versus disposing of obsolete inventory.

---

Definitions:

Cash Sales

Transactions where payment is made in cash at the time of the sale.

Cash from Sale

The cash received from selling goods or services.

Cash Receipts Journal

A financial journal that records all cash transactions, including sales and received payments, entering a business.

Accounts Payable

Obligations of a company indicating funds due to lenders for products and services acquired through credit.