In determining that the accounts payable cutoff is correct, it is essential that the cutoff tests be coordinated with the:
A) tests on long-term liabilities.
B) cash count.
C) confirmation of payables.
D) physical observation of inventory.

Question

Quizplus · Accepted Answer

The accounts payable cutoff is closely related to the physical observation of inventory because purchases of inventory should be recorded in the same period as the inventory is received. Coordinating these tests ensures that liabilities are recorded in the correct period.

In Determining That the Accounts Payable Cutoff Is Correct, It