An Unusual Feature of Cut-Off Tests Is That They

question 25

Multiple Choice

An unusual feature of cut-off tests is that they:

• A) are always performed at year-end to verify a recorded balance even though they are tests of transactions.
• B) are never performed at year-end to verify a recorded balance because they are tests of transactions.
• C) are always performed at year-end to verify transactions even though they are tests of details of balances.
• D) none of the above.

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Definitions:

Labor-Hour

A unit of measure representing an hour of work performed by an employee.

Fixed Overhead Volume Variance

The difference between the expected fixed overhead costs based on standard volume and the actual fixed overhead incurred.

Electrical Motor

A device that converts electrical energy into mechanical energy, widely used in various applications including appliances, industrial machinery, and vehicles.

Standard Machine-Hours

A predetermined measure of how long machines are expected to operate to complete a production task.