Cutoff is more important in testing transactions as a client may want to record a gain or a loss on the sale at the end of the year.

Question

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Cutoff is important in testing transactions as it ensures that transactions are recorded in the correct accounting period, which is important for determining gains or losses at the end of the year. If cutoff is not properly applied, financial statements may be misstated and the client may not be able to accurately calculate their gains or losses.

Cutoff Is More Important in Testing Transactions as a Client