- 1 Marks
AA – L2 – SA – Q1.9 – Cut-Off
Question
What is NOT true about cut-off?
A Last goods received note will determine the last invoice appearing in receivables
B It determines where one period ends and another one starts
C Details should be taken at the inventory count
D It is a good way to manipulate the financial statements
Answer
A
Explanation:
Cut-off ensures transactions are recorded in the correct period (B), involves inventory count details (C), and can be manipulated if controls are weak (D). However, the last goods received note relates to inventory and payables, not receivables (A), which are driven by sales invoices. Thus, A is incorrect and the right answer.
- Tags: Cut-off, Financial Statements, ICAG, Inventory Count
- Level: Level 2
- Topic: Audit and Assurance Evidence
- Uploader: Salamat Hamid