Tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year provide assurance about management's assertion of:
A)Classification.
B)Cut-off.
C)Occurrence.
D)Accuracy.

Question

Quizplus · Accepted Answer

Tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year are concerned with cut-off. Cut-off is the timing of transactions, where transactions are recorded in the appropriate accounting period. By testing the cut-off of credit sales, auditors can ensure that all credit sales made before the end of the year have been properly recorded in the current year's financial statements.

Tests Designed to Detect Credit Sales Made Before the End