L13 Notes_Part_1 - Volume passing through these accounts...

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© W.R. Knechel Overview “How to” part of course – relevance to senior and junior. This textbook is consistent with all others in that it starts with the revenue cycle. What motivates management to overstate NI? What is the easiest way to obtain a higher NI? 60-70%; SAS # 99 presumption of guilt. Integrate concepts from earlier chapters only now apply concepts to a particular business process
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© W.R. Knechel Importance of Sales and Customer Service Process Size of sales account Size of Accounts Receivable relative to Current Assets
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Unformatted text preview: Volume passing through these accounts Complexity of these accounts (SR&A, S Disc, % of Sales, % of Aged A/R, products, locations, nature of product sold, related parties sales) Over 60% of audit failures involve revenue and asset overstatement Interstate example W.R. Knechel Accounting for Sales Revenue The revenue principle requires that revenues be recorded when: The Earning Process is substantially complete . The amount is measurable. Cash Collection is reasonably assured. Magazines Winery FOB...
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L13 Notes_Part_1 - Volume passing through these accounts...

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