Much of the understanding of revenue transactions for compliance with GAAP can be performed by accomplishing which of the following tasks?
A)Examining sales contracts and inquiry of management.
B)Confirming sales with customers.
C)Discussing the transactions with qualified members of the Financial Accounting Standards Board.
D)Comparing shipping documents with invoices.

Question

Quizplus · Accepted Answer

Examining sales contracts and inquiring of management can provide information on the nature of the revenue transactions, including any contingencies or potential risks, and can help ensure that revenue is recognized in accordance with GAAP. Confirming sales with customers and comparing shipping documents with invoices may also be useful, but may not provide a complete understanding of the revenue transaction in all cases. Discussing transactions with the Financial Accounting Standards Board is not necessary for most compliance with GAAP requirements.

Much of the Understanding of Revenue Transactions for Compliance with GAAP