An auditor's examination of the sales account using a cutoff test would most likely detect which of the following?
A)Kiting.
B)Sales made with improper credit terms.
C)Lapping of accounts receivable.
D)Sales recorded in the wrong period.

Question

Quizplus · Accepted Answer

A cutoff test is used to ensure that transactions are recorded in the correct accounting period. Therefore, sales recorded in the wrong period would be detected through this test. Kiting, sales made with improper credit terms, and lapping of accounts receivable would not necessarily be detected through a cutoff test.

An Auditor's Examination of the Sales Account Using a Cutoff