It is easy to test for a cash receipts cutoff error by:
A) observing the counting of cash at the balance sheet date.
B) performing a four- column proof- of- cash.
C) reconciling the bank statement.
D) tracing recorded cash receipts to bank deposits on the bank statement of a subsequent period.

Question

Quizplus · Accepted Answer

Tracing recorded cash receipts to bank deposits on the bank statement of a subsequent period will help identify any cash receipts that were recorded in the next accounting period, indicating a cash receipts cutoff error. Options A, B, and C do not necessarily identify cutoff errors.

It Is Easy to Test for a Cash Receipts Cutoff