Which of the following might be detected by auditors' cutoff review and examination of sales journal entries for several days prior to the balance sheet date?
A)Lapping year-end accounts receivable.
B)Inflating sales for the year.
C)Kiting bank balances.
D)Misappropriating merchandise.

Question

Quizplus · Accepted Answer

Auditors' cutoff review and examination of sales journal entries for several days prior to the balance sheet date can help in detecting any cases of inflating sales for the year. This is because it can help in identifying any sales entries recorded after the balance sheet date but included in the current year's financial statements, leading to an overstatement of sales. The other options, such as lapping year-end accounts receivable, kiting bank balances, and misappropriating merchandise, are not typically detected through sales journal cutoff reviews.

Which of the Following Might Be Detected by Auditors' Cutoff