It is easy to test for a cash receipts cutoff misstatement by tracing recorded cash receipts to subsequent-period bank deposits on the bank statement.

Question

Quizplus · Accepted Answer

This statement is true. Tracing recorded cash receipts to subsequent-period bank deposits on the bank statement is a common procedure used to test for cash receipts cutoff misstatements. By comparing the dates of the recorded cash receipts and subsequent bank deposits, auditors can ensure that all cash receipts have been correctly recorded in the appropriate period.

It Is Easy to Test for a Cash Receipts Cutoff