Cutoff Procedures for Inventory Purchased Should Be Designed by Companies

question 65

Multiple Choice

Cutoff procedures for inventory purchased should be designed by companies to assure the company that:

• A)inventory owned by the company has been received.
• B)inventory included in the year end inventory count has been paid.
• C)inventory received before year end was recorded before year end.
• D)inventory was correctly valued at year end.

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Definitions:

Net Income

Company's overall earnings post the subtraction of taxes and operational costs from its total revenue.

Trend Income Statement

An income statement that shows several years of financial data in a horizontal format, making it easier to identify trends and patterns.

Sales

The total amount of goods or services sold by a company during a specific period.

Trend Balance Sheet

A financial statement that shows how the assets, liabilities, and equities of a company have changed over a period of time.