If the buyer believes that the seller has overstated revenue in a specific accounting period, the buyer can reconstruct revenue by examining usage levels, in the same accounting period, of the key inputs required to produce the product or service.

Question

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By examining usage levels of key inputs required to produce the product or service, the buyer can estimate the revenue generated during the specific accounting period and reconstruct revenue.

If the Buyer Believes That the Seller Has Overstated Revenue