To Determine Whether Sales Transactions Have Been Recorded in the Proper

question 109

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's letter of representation includes the 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.

---

Definitions:

Opportunity Cost

The disqualification of possible advantages obtainable from other scenarios when one is embraced.

Motorcycles

Two-wheeled motor vehicles that are often used for transportation, recreation, or sport, known for their maneuverability and speed.

Hybrid Cars

Vehicles powered by a combination of an internal combustion engine and one or more electric motors, using energy stored in batteries.

Opportunity Cost

Opportunity Cost is the value of the next best alternative foregone as the result of making a decision.