With Respect to Performing Analytical Procedures to Understand Total Revenue

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