ACCA Audit and Assurance (F8) Practice Exam

Which is NOT a procedure used to ensure the "Cut Off" of receivables?

1. Review goods dispatched and returns around year-end

2. Inspect cash documentation post cut-off date

3. Reconciliate the sales ledger control account

4. Check postings to the sales ledger in the same period

The correct answer is: Inspect cash documentation post cut-off date

The procedure that is not typically used to ensure the "Cut Off" of receivables concerns inspecting cash documentation post cut-off date. The cut-off assertion is focused on ensuring that transactions are recorded in the correct accounting period, which is crucial for accurate financial reporting. The review of goods dispatched and returns around year-end helps verify that sales and returns are recorded in the correct period. Similarly, reconciling the sales ledger control account checks that records match with the accounting entries, ensuring that receivables and sales are accurately reflected. Additionally, checking postings to the sales ledger in the same period is essential for confirming that all transactions are captured correctly within the designated accounting period. In contrast, inspecting cash documentation after the cut-off date would not directly address the timing of sales or receivables being recognized in the appropriate period. Instead, this type of documentation merely verifies cash receipts, which could relate to transactions recorded prior to or after the cut-off. Therefore, it does not specifically ensure the cut-off for receivables is achieved.