Answered Questions

Date Submitted	14-Jul-10
Category	Audit & Assurance
Heading	Exam 2010 Revenue Classification and Exam 2008 (3) cut off
Question	I am confused in the difference in recognising the revenue. In 2008 exam paper stated that revenue had been recorded in revenue instead of revenue in advance therefore cut off was at risk (pre-paid bookings) In 2010 exam paper stated that revenue was recorded in revenue in advance but may be at risk as it may be revenue - classification Can't work out the different - to be both scenarios is that they may be in the wrong account albeit one in revenue and one in revenue in advance - but now confused as why classification is cut off and the other is classification.
Answer	There is both a classification issue and a cut-off issue in the 2010 question. However, I believe that the major issue is cut-off as it appears to have been recorded in the wrong period, not just recorded in the wrong account.