CUT-OFF Definition

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CUT-OFF is designating a point of termination. An auditor uses tests of cutoff to obtain evidence that transactions for each year are included in the financial statements of the appropriate year.

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ASSOCIATE, in business, is a person brought together with a company or another person into a relationship in any of various intangible ways.

COMPENSATING BALANCES are the funds a business might be required to keep in a deposit or reserve account to help offset what the bank perceives as risk. The lender might require that an amount based on the business' average account balance or a certain percentage of the face value of the loan be maintained in a deposit account.

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