Which of the Following Is Not a Method to Overstate

question 101

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 early in the month even though shipment of goods or providing the service occurs late in the month.
• 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 a swap (exchange)transactions,when the customer and the client exchanged products or services and both parties recognize revenue based on the exchange.

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Definitions:

Total Current Liabilities

The sum of all debts and financial obligations a company is expected to pay within one fiscal year.

Inventory Turnover Rate

A measure of how quickly a company sells and replaces its stock of goods within a certain period.

Balance Sheet

A report detailing a business's assets, debts, and owner's equity at a particular moment, offering a glimpse into its financial health.

Income Statement

A financial statement that shows a company's revenues and expenses, and profits or losses over a specific period of time.