You are engaged in the year-end audit of Raintree Distribution Inc. Raintree sells magazines to newsstands and
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Question:
You are engaged in the year-end audit of Raintree Distribution Inc. Raintree sells magazines to newsstands and other retailers with a one-month right of return. For example, a retailer can return magazines that are sold in December to Raintree for a full refund until the end of January of the next year. Raintree's year end is December31. On average, the amount of returns is considered material.
Question 1: What is the risk for the financial statements?
Question 2: What is the account impacted and the audit assertion?
Question 3: What are two procedures to perform?
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