A proper cut-off of payment transactions at the year end, such as verifying and examining the date of chequoutstanding as at the end of the reporting period, is essential to the correct presentation of cash and accounts payable at the end of the reporting period.

Question

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A proper cut-off of payment transactions at the year-end helps in accurately presenting the cash and accounts payable balance as at the end of the reporting period. This ensures that all payments made and received during the reporting period are recorded in the correct accounting period. Failure to cut off payment transactions will result in errors in the financial statements, and may also lead to misstated cash and accounts payable balances.

A Proper Cut-Off of Payment Transactions at the Year End