The logical and psychological bases for setting cutting scores for criterion-referenced tests are examined; they are found to be intrinsically arbitrary and are often examples of misdirected precision and axiomatization. The term, criterion referenced, originally referred to a technique for making test scores meaningful by controlling the test development process. It has since been applied to a variety of mathematical techniques for setting cutting scores. However, because of the nature of tests and the nature of education, no process of quantification will alter the critical concern, the definition of mastery or of minimal competence, which remains either unanswered or vaguely approximate. Different methods of setting cutting scores may provide widely divergent solutions to a given problem. It is important to recognize that cutting scores are arbitrary. However, no criticism is implied with respect to criterion reference or domain reference as techniques of test construction. (CTM)