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.

Question

Quizplus · Accepted Answer

The overall approach used when performing cutoff tests is to analyze transactions occurring within a few days before and after year-end. This involves reviewing the dates on invoices, shipping documents, and other relevant documents to ensure that sales and purchases are recorded in the correct period. The other options listed do not accurately describe the overall approach used for cutoff tests.

To Determine Whether Sales Transactions Have Been Recorded in the Proper