The sales cutoff test is designed to obtain reasonable assurance that ________.
A)sales were actually made
B)sales have been recorded for the correct amounts
C)sales have been recorded in the correct accounts
D)sales and accounts receivable are recorded in the accounting period in which the transactions occurred

Question

Quizplus · Accepted Answer

The sales cutoff test is primarily designed to ensure that sales and accounts receivable are recorded in the accounting period in which the transactions occurred. It aims to obtain reasonable assurance that sales recorded on or before the balance sheet date are valid and accurate, and that any subsequent payments or adjustments are recorded in the appropriate period. While the test may also provide some assurance about the accuracy and classification of recorded sales, these are not its primary objectives.

The Sales Cutoff Test Is Designed to Obtain Reasonable Assurance