During an audit of the financial statements of Houston Wholesalers, Inc., for the year ended June 30,

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During an audit of the financial statements of Houston Wholesalers, Inc., for the year ended June 30, 1999, an auditor performs several cutoff tests.

Required:

1. What are cutoff tests and why are they performed?

2. The auditor wishes to test Houston's sales cutoff at June 30, 1999. Discuss procedures that should be included in the test.

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