In testing for cutoff, the objective is to determine:
A) that no transactions of the current period have been delayed and recorded in a future period.
B) whether transactions are recorded in the proper period.
C) that no transactions from the prior period are included in the current period's balances.
D) whether all of the current period's transactions are recorded.

Question

Quizplus · Accepted Answer

The objective of cutoff testing is to ensure that transactions are recorded in their appropriate period, and that no transactions of the current period have been delayed and recorded in a future period, and vice versa. Therefore, option B is the correct choice. Option A and C are also important objectives of testing, but they do not specifically focus on the proper timing of transactions. Option D is not accurate, as cutoff testing does not focus solely on ensuring all transactions are recorded, but rather their proper timing.

In Testing for Cutoff, the Objective Is to Determine