With Respect to Performing Analytical Procedures to Understand Total Revenue

question 45

Multiple Choice

With respect to performing analytical procedures to understand total revenue, the auditor should understand _______.

• A)revenue recognition methods of all firms within the industry
• B)how the firm relates its cost of goods sold to revenue recognition
• C)the entity's capacity, the maximum volume of sales that it could generate if it fully utilized its facilities and employees to manufacture and deliver products and services
• D)how the client firm handles depreciation entries related to contra-revenue accounts

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Definitions:

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