Question

A customer mails and records a check to a client for payment of an unpaid account on December 30. The client receives and records the amount on January 2. The records of the two organizations will be different on December 31. This represents:

A CUTOFF MISSTATEMENT
A TIMING DIFFERENCE
A. Yes Yes
B. No No
C. Yes No
D. No Yes

Answer 1

There is a timing difference in recording the payment between the customer and the client, resulting in different records on December 31.

Step-by-step explanation:

The records of the two organizations will be different on December 31 because there is a timing difference in when the check was mailed and recorded. The customer mailed the check on December 30, but the client received and recorded it on January 2. This means that on December 31, the customer's records will show the payment as recorded, while the client's records will show the account as still unpaid. This represents a timing difference in recording the transaction.