Which of the Following Would Overstate a Company's Net Income

question 149

Multiple Choice

Which of the following would overstate a company's net income?

• A)Counting shipments of customers' orders as revenue before payment has been received.
• B)Shipping goods to customers without receiving orders from those customers,and recording the transactions as revenue.
• C)Accruing liabilities for marketing expenses before they are incurred.
• D)Making an accrual adjusting entry for interest earned on a bond investment.

Differentiate between various types of costs (fixed, variable, product, period) and their relevance to accounting and decision making.

Analyze how direct and indirect costs impact product pricing and cost management.

Understand the role of manufacturing overhead in product costs.

Recognize the difference between nonmanufacturing and manufacturing costs and their implications for financial reporting.

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