The Auditor's Tests for Proper Cutoff of Current Year Acquisitions

question 121

True/False

The auditor's tests for proper cutoff of current year acquisitions of property, plant, and equipment are usually done as part of accounts payable cutoff tests.

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Definitions:

Agency Relationship

A legal relationship in which one party, the agent, is authorized to act on behalf of another party, the principal, in conducting business transactions.

Independent Contractor

One who contracts to do a job and who retains complete control over the methods employed to obtain completion.

Durable Power

A legal document that grants someone the authority to act on another's behalf in legal or financial matters, continuing in effect even if the grantor becomes incapacitated.