One method for testing cutoff and in-transit inventory is for the auditor to examine shipping documents for a few days before and after year-end and determine whether the inventory records properly reflect the transaction in the correct period.

Question

Quizplus · Accepted Answer

This is a valid method for testing cutoff and in-transit inventory as the auditor can compare shipping documents with inventory records to ensure that all transactions have been recorded in the proper period.

One Method for Testing Cutoff and In-Transit Inventory Is for the Auditor