Much of the Understanding of Revenue Transactions for Compliance with GAAP

question 51

Multiple Choice

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.

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Definitions:

Gross Method

An accounting method for recording purchases at the full invoice price without deducting any cash discounts at the time of purchase.

Check Register

A record of all checks written, deposits made, and charges or credits to a bank account, used for managing funds and reconciling bank statements.

Voucher Register

A journal or ledger used to record vouchers and their related purchases, payments, or expenses.

Vouchers Payable

Liabilities or accounts payable that are supported by a voucher evidencing the goods or services received.