II. For each of the following situations based on SAB No. 101,
indicate the audit evidence that should be obtained to determine
whether revenue should be recognized or not in the current
period:
Best Products is a retailer of appliances that offers “layaway”
sales to its customers twice a year. Best retains the merchandise,
sets it aside in its inventory, and collects a cash deposit from
the customer. The customer signs an installment note at the time
the initial deposit is received, but no payments are due until 30
days after delivery.