Boulder Industrial Supply Co. — Revenue cutoff testing — Accounting Assembly sample case · Accounting Assembly

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Accounting Assembly

Sample case — Boulder Industrial Supply Co. — Revenue cutoff testing

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Revenue cutoff testing

Boulder Industrial Supply Co.

Fiscal year end: 12/31/2025
Engagement: Fieldwork

Staff Memo

A big sale ($58,400) hit the books on the very last day of December.
Your job: figure out if those goods really shipped in December.
Start with the invoice, then follow the shipping documents.

Mar 10, 2026- Senior Auditor

Documents

Evidence
Memos

Select a document

Choose a file from the list to preview it here while you work on the assignment.

Your assignment

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1. What invoice amount was recorded as December revenue for Cascade Manufacturing?
Hint: Open Sales Invoice INV-10248 and find the total due.
$
2. Per the bill of lading, on what date did the carrier pick up the goods?
Hint: Open Bill of Lading BOL-88214 — the carrier acknowledgment box shows the pickup date. The shipping log confirms it.
A. December 31, 2025B. December 30, 2025C. January 5, 2026D. January 2, 2026
3. Which document is the most persuasive evidence of when the goods actually shipped?
Hint: Compare who prepared each document — the packing slip is the client's own paperwork, but the bill of lading is signed by the carrier's driver.
A. Sales manager's emailB. Sales invoice dated December 31C. Packing slip prepared by the warehouseD. Bill of lading signed by the carrier
4. Should the $58,400 sale be recognized as December revenue?
Hint: Under FOB shipping point, revenue is earned when the goods ship — not when the invoice is printed. Check the Shipping Log and the email thread for what really happened.
A. No — goods shipped January 2, so recognize in JanuaryB. No — the sale should never be recognizedC. Yes — the invoice is dated December 31D. Yes — the customer PO was received in December
5. What amount should be proposed to reverse December revenue and accounts receivable?
Hint: The full amount on Sales Invoice INV-10248 belongs in January revenue.
$