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Hi
1) There is an audit risk that Customers who wish to purchase a property are required to pace an order and a 5% non refundable deposit prior to the completion of the building. In its explanation examiner has mentioned that “These deposits should not be recognized as revenue in the profit or loss until the performance obligations as per the contracts have been satisfied, which is likely to be when the building is finished and the sale process is complete. Instead they should be recognized as deferred income within current liabilities.
Management may have incorrectly treated deferred income as revenue resulting in overstated revenue and understated liabilities”Here like the main point which we have to write is from Management may…. But suppose if in exam along with this we also write the previous whole para , so will there be any issue? will this thing irritate examiner?
Text copied from the Q paper will generally earn no marks so is a waste of time.
Sir I am not talking about copying text from Q paper.
I am saying that there is a risk in sep/dec 2017 paper that ” There is an audit risk that Customers who wish to purchase a property are required to pace an order and a 5% non refundable deposit prior to the completion of the building.”
In its explanation examiner has mentioned that “These deposits should not be recognized as revenue in the profit or loss until the performance obligations as per the contracts have been satisfied, which is likely to be when the building is finished and the sale process is complete. Instead they should be recognized as deferred income within current liabilities.
Management may have incorrectly treated deferred income as revenue resulting in overstated revenue and understated liabilities”
Here like the main point which we have to write is from Management may…. But suppose if in exam along with this we also write the previous whole para i.e “These deposits should not be…” , so will there be any issue? will this thing irritate examiner?
My apologies – I misunderstood your request. I am sorry, but the aim of this forum is to respond to questions of a technical nature concerning OpenTuition’s content. I am prepared to extend my support to answering technical queries concerning questions as published by ACCA but I cannot give advice on what you write.
For support that I cannot offer I recommend that you:
– use the student support forum https://opentuition.com/forum/acca-forums/
– find a study buddy https://opentuition.com/studybuddy/
– find a personal tutor
– sign up for ACCA/BPP’s FREE English language support https://englishforacca.bppuniversity.ac.uk/ – there is a section designed specifically for audit and assuranceI understand but I just meant to ask that as examiner has mentioned the following answer for the audit risk mentioned in my first post
“These deposits should not be recognized as revenue in the profit or loss until the performance obligations as per the contracts have been satisfied, which is likely to be when the building is finished and the sale process is complete. Instead they should be recognized as deferred income within current liabilities.
Management may have incorrectly treated deferred income as revenue resulting in overstated revenue and understated liabilities”
But in exam if I write both the above paras ,then will the First para irritate examiner? Only this much I intend to ask
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