An auditor's examination of the sales account using a cut-off test would most likely detect which of the following?
A)Kiting.
B)Sales that should be deferred.
C)Lapping of accounts receivable.
D)Sales recorded in the wrong period.

Question

Quizplus · Accepted Answer

A cut-off test involves examining transactions on or around the end of the reporting period to ensure they are recorded in the correct period. Therefore, it is most likely to detect sales recorded in the wrong period. Kiting involves manipulating account balances and would not necessarily be detected through a cut-off test. Deferral of sales and lapping of accounts receivable are typically tested through other audit procedures.

An Auditor's Examination of the Sales Account Using a Cut-Off