For most audits, a proper cash receipts cutoff is more important than either the sales or the sales returns and allowances cutoff.

Question

Quizplus · Accepted Answer

A proper sales cutoff is generally considered more important because it directly affects the revenue recognition and matching principle, ensuring that sales and related costs are recorded in the correct accounting period. Cash receipts cutoff is important for cash management but does not typically impact revenue recognition as directly as sales cutoff procedures.

For Most Audits, a Proper Cash Receipts Cutoff Is More