Question
2. Fly by Night Auto Sales is one of the largest used car dealers in the United States. An average days sales is $750,000. FNASs
2. Fly by Night Auto Sales is one of the largest used car dealers in the United States. An average days sales is $750,000. FNASs revenue recognition policy is to recognize revenue when the deal is signed and financing has been approved. Since the vehicle sold may be in another one of their locations, actual delivery may take from one to five days.
a. Is the revenue recognition policy in accordance with GAAP? Why or why not?
b. What adjustments need to be made to net income because of their revenue recognition policy?
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Auditing Cases
Authors: Frank A. Buckless, Mark. S. Beasley, Steven M. Glover, Douglas F. Prawitt
1st Edition
978-0130800015
