Sales revenue is typically significant due to:
A) the overall inherent risk associated with revenue.
B) the volume of transactions that flow through the account.
C) its size.
D) All of the above

Question

Quizplus · Accepted Answer

Sales revenue is typically significant due to all three factors:

A) the overall inherent risk associated with revenue is high because revenue represents the inflow of economic resources for a company, and misstatements in recording revenue can lead to overstatement or understatement of a company's financial performance.

B) the volume of transactions that flow through the account can be significant for companies that rely heavily on sales revenue, such as retail or e-commerce businesses.

C) its size can be significant because sales revenue is one of the top-line numbers that investors and analysts look at to evaluate a company's financial health and growth potential.

Sales Revenue Is Typically Significant Due To