Hi, Question one referes to a payment being made for $3,000 on 28 October for expenses relatng to November to January. Would this not be recognised at October month end as a prepayment for the full $3,000?
Thanks
A
adch111·
My mistake as the audit will be assessing the prepayments at year end.
K
KimTutor·
You got it!
K
KimTutor·
See page 86 of the notes in the section "Learn the assertions" - existence certainly relates to any balance - cut-off is an assertion about transactions.
J
Jon·
For question #4 the answer states: "Cut-off" is an assertion about classes of transactions"...isn't that the "classification" assertion instead? I believe the correct answer is "Existence" not relating to prepayment/accrual assertions?
Thanks