When testing cutoff for sales and receivables at December 31 (year end) an auditor is...
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Accounting
When testing cutoff for sales and receivables at December 31 (year end) an auditor is confronted with the following four scenarios. Which of the four most likely requires the auditor to propose an adjusting entry at the balance sheet date?
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| Terms of trade are FOB shipping point. Goods were shipped on January 2, and the sale was recorded on January 4. |
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| Terms of trade are FOB destination. Goods were shipped on December 31, and the sale was recorded on January 8. |
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| Terms of trade are FOB destination. Goods were shipped on December 31, and the sale was recorded on December 31. |
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| Terms of trade are FOB shipping point. Goods were shipped on December 31, and the sale was recorded on December 31. |
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