In the audit of the revenue of Hiram Manufacturing Company,the auditors obtain a number of shipping documents shortly before year-end and immediately following the year under audit.The auditors compare the documents to the sales journal in order to test which of the following assertions?
A)Existence of sales.
B)Presentation and disclosure of receivables.
C)Cutoff of sales transactions.
D)Completeness of receivables.

Question

Quizplus · Accepted Answer

The auditors compare the shipping documents obtained shortly before year-end and immediately after the year under audit to the sales journal to test the cutoff of sales transactions. This helps ensure that sales are recorded in the correct period, which is an important aspect of revenue recognition.

In the Audit of the Revenue of Hiram Manufacturing Company,the