Valid evidence obtained in an audit for testing the cutoff of gross sales includes receiving reports for returned merchandise.

Question

Quizplus · Accepted Answer

Receiving reports for returned merchandise can provide evidence for testing the cutoff of gross sales to determine if sales were recorded in the proper period. The returned merchandise can help identify whether the sales were recorded in the current period or a prior period. Therefore, receiving reports for returned merchandise can be valid evidence in an audit for testing the cutoff of gross sales.

Valid Evidence Obtained in an Audit for Testing the Cutoff