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.

Question

Quizplus · Accepted Answer

Cutoff procedures for inventory purchased are designed to ensure that inventory received before year-end was recorded before year-end. This helps to prevent errors in the valuation of year-end inventory, which is crucial for accurate financial reporting. The other options are also important aspects of inventory management, but are not necessarily the primary focus of cutoff procedures.

Cutoff Procedures for Inventory Purchased Should Be Designed by Companies