In Sales Cut-Off Testing,the Auditor Uses the Inspection Procedure of Vouching

question 96

Multiple Choice

In sales cut-off testing,the auditor uses the inspection procedure of vouching and tracing to gather evidence about which assertion(s) ?

• A)existence and occurrence
• B)accuracy
• C)valuation or allocation
• D)completeness
• E)presentation and disclosure
• F)both A and B
• G)both A and D

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Definitions:

Bad Debt Expense

An expense reported on the income statement, representing the amount of receivables that a company does not expect to collect due to customer default.

Current Assets

Resources owned by a company that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business, whichever is longer.

Sales Discounts

A reduction in the price of goods or services offered to customers, usually as an incentive for early payment or bulk purchases.

Net Sales

The amount of sales generated by a company after deducting returns, allowances for damaged or missing goods, and discounts.