13. Revenues and Expenses
a. Prepare a memorandum describing the client’s policies with respect to income recognition and recording of expenses. Inquire as to whether the client has properly considered the following:
• Revenues from the sale of major products and services are recognized in the appropriate period
• Purchases and expenses are recognized in the appropriate period and are properly classified
• Discontinued operations or extraordinary items (as applicable) are properly reflected in the financial statements.
