Cutoff procedures for inventory purchased should be designed by companies to assure that
A) inventory owned by the company has been received.
B) inventory included in the year-end inventory count has been paid.
C) inventory received before year-end was recorded before year-end.
D) inventory was correctly valued at year-end.

Question

Quizplus · Accepted Answer

Cutoff procedures for inventory purchased should be designed to assure that inventory received before the year-end was recorded before year-end. This ensures that the inventory is properly accounted for in the correct accounting period, which is a key aspect of financial reporting accuracy. The other choices (A, B, D) are important aspects of inventory management and accounting, but they are not specifically related to cutoff procedures.

Cutoff Procedures for Inventory Purchased Should Be Designed by Companies