Cutoff misstatements exist when subsequent period transactions are recorded in the current period.

Question

Quizplus · Accepted Answer

Cutoff misstatements occur when transactions that took place in one period are recorded in a different period, which can affect the accuracy of the financial statements. Specifically, if transactions that should have been recorded in the previous period are recorded in the current period, this can result in an overstatement of current period revenue or expenses, leading to a misstatement in the financial statements.

Cutoff Misstatements Exist When Subsequent Period Transactions Are Recorded in the Current