To Determine Whether Sales Transactions Have Been Recorded in the Proper

question 10

Multiple Choice

To determine whether sales transactions have been recorded in the proper accounting period, the auditor performs cutoff tests. Which of the following best describes the overall approach used when performing cutoff tests?

• A)Ascertain that management has included in the representation letter a statement that transactions have been accounted for in the proper accounting period.
• B)Analyze transactions occurring within a few days before and after year-end.
• C)Confirm year-end transactions with regular customers.
• D)Examine cash receipts in the subsequent period.

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Definitions:

Strategic Importance

The significance or critical value of a plan, decision, or action in achieving long-term objectives and ensuring the success and sustainability of an organization.

Human Capital

The collective skills, knowledge, and other intangible assets of individuals that can be used to create economic value.

Diversity Characteristics

Traits and attributes that differentiate individuals from each other, including but not limited to race, gender, age, religion, disability, and cultural background, emphasizing the importance of inclusiveness in society and organizations.

National Origin

Refers to the country where a person was born, or, more broadly, the country from which their ancestors came.