Auditors will examine significant sales returns immediately subsequent to the period under audit in order to do which of the following?
A)substantiate cutoff and the occurrence of net sales transactions.
B)test the sufficiency of cash balances to cover refunds.
C)monitor customer satisfaction for disclosure.
D)assess the nature of procedures that will be performed for the next period's audit.

Question

Quizplus · Accepted Answer

Auditors will examine significant sales returns immediately subsequent to the period under audit in order to substantiate cutoff and the occurrence of net sales transactions. This means that auditors will verify whether sales transactions occurred during the period under audit or not and whether revenue from these transactions were recorded in the financial statements for that period.

Auditors Will Examine Significant Sales Returns Immediately Subsequent to the Period