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Question - The famous singer Rihanna is going on a tour. She plans to perform at a concert on Sept 30th. Her agent is handling her financial transactions and recorded $400,000 cash that was received in June, as revenue. This cash is related to the September 30th ticket sales. As of July 1, Rihanna's accountant noticed that the financial statements reflect all of the revenue from the June ticket sales, a concert yet to be held. The accountant has these questions for the manager:
Which accounting method was used? Explain why you believe this method was used.
Did the agent correctly record the transaction under GAAP? Why or why not?
Explain which GAAP principle applies to this scenario.
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