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NEW QUESTION: 1
Tests designed to detect purchases made before the end of the year that have been recorded in the
subsequent year most likely would provide assurance about management's assertion regarding:
A. Accuracy.
B. Cutoff.
C. Obligations.
D. Classification.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Choice "C" is correct. If purchases made before the end of the year have been recorded in the subsequent
year, inventory will not be complete. The auditor uses cutoff tests to detect such situations and to
determine that inventory quantities include all products, materials and supplies owned by the company.
(Note that the cutoff assertion is closely related to the completeness and occurrence assertions.)
Choice "A" is incorrect. Assertions about accuracy deal with whether data related to recorded transactions
has been included in the financial statements at appropriate amounts. Cutoff tests do not provide evidence
related to the accuracy assertion for purchases.
Choice "B" is incorrect. Assertions about obligations deal with account balances, not with transactions and
events.
Choice "D" is incorrect. Assertions about classification deal with whether particular components of the
financial statements are properly presented, described, and disclosed. Cutoff tests would not provide
evidence relevant to classification.
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D. 20 thick LUNs of 5 GB each
Answer: D
NEW QUESTION: 3
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D. FSM
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