An auditor's examination of the sales account using a cut-off test would most likely detect which of the following?
A)kiting.
B)sales that should be deferred.
C)lapping of accounts receivable.
D)sales recorded in the wrong period.

Question

Quizplus · Accepted Answer

A cut-off test is used to determine whether transactions have been recorded in the correct accounting period. Therefore, it is likely to detect sales recorded in the wrong period. Kiting and lapping of accounts receivable are not related to the sales account, and the detection of sales that should be deferred would require a different type of testing such as variable consideration testing in revenue recognition.

An Auditor's Examination of the Sales Account Using a Cut-Off