Which of the Following Is Not a Method to Overstate

question 2

Multiple Choice

Which of the following is not a method to overstate revenues and receivables?

• A)recording fictitious sales,recognizing revenue on shipments that were not made.
• B)early recognition of sales,recognizing revenue in the current year even though shipment of goods or providing the service occurs in the following year.
• C)early shipment of goods,recognizing revenue before the customer requests delivery.
• D)shipment of a larger quantity of goods than the customer ordered.
• E)recognition of revenue based on swap (exchange)transactions,when the customer and the client exchanged different products or different services and both parties recognize revenue based on the exchange.

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Definitions:

Recapture Provisions

Regulations that allow the government to collect taxes on previously deducted or credited investment income when certain assets are sold or disposed of.

Real Property

Land and anything permanently attached to the land, like buildings, is considered real property.

Capital Asset

A Capital Asset is a significant piece of property such as investments, real estate, and personal items that is not easily sold in the regular course of a business's operations.

Section 1231

A tax term relating to the classification of property that includes depreciable property and real property (e.g., buildings and equipment) used in a trade or business and held for more than one year. gains from the sale of Section 1231 property can be taxed at more favorable capital gains rates rather than ordinary income rates.