Chapter 16. For MC16-8, I have eliminated (b) and (c). How should I choose between (a) and (d)?
Very simple, there is no basis for (a) i.e., more or less material between the two accounts, as such, no basis to use different procedures between the two accounts based on materiality. Chapter 18. For MC18-1, I have read your explanation in the FAQ but am still not convinced that (b) is the right answer. My understanding is that a cutoff test is performed with time as a reference, so I think it has something to do with year-end. Also, are you suggesting that cutoff and ownership are related? No. I do not suggest cutoff and ownership are related. I think you are not convinced that (b) is the right answer based on your ” My understanding is that a cutoff test is performed with time as a reference”, which is true for individual cut-off test, such as sales cutoff, purchase cutoff, or inventory cutoff, EACH ON ITS OWN. But, the question combined two cutoffs — “… PURCHASE cutoff…” in the question and ” … INVENTORY cutoff …” in each of the 4 options (a) to (d).
