Purchase Cutoff Procedures Should Be Designed to Produce Evidence of Whether

question 76

Multiple Choice

Purchase cutoff procedures should be designed to produce evidence of whether merchandise is included in the inventory of the client company if the company

• A)Has paid for the merchandise.
• B)Has physical possession of the merchandise.
• C)Holds legal title to the merchandise.
• D)Holds the shipping documents for the merchandise issued in the company's name.

---

Definitions:

Customer Payments

The transactions where a customer pays the company for goods or services provided.

Asset Account

An account on a balance sheet representing resources owned by a company with future economic value.

Debited

An accounting entry that increases an asset or expense account, or decreases a liability or equity account.

Write Checks

The process of creating checks from a business account to pay for company expenses.