Which of the Following Are Assertions About the Revenue Process

question 61

Multiple Choice

Which of the following are assertions about the revenue process?

• A)existence or occurrence - for both classes of transactions and account balances
• B)completeness - account balances
• C)valuation and allocation - for account balances
• D)rights and obligations - for classes of transactions and account balances
• E)accuracy - for classes of transactions and account balances
• F)both A and C
• G)both B and D

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Definitions:

Transitory Components

Elements affecting financial statements or economic conditions that are expected to be temporary and not indicative of ongoing future performance.

Value-Irrelevant

Financial information or factors that do not impact an investor's or decision maker's assessment of a company's value.

Reported Earnings

The net income that a company reports to its investors and shareholders, often found on its income statement.

Abnormal Earnings

Profits that exceed or fall short of the expected normal return for a given year or period.