Which of the following is not a fraud method to overstate revenues?
A) Recording future sales in the current period
B) Recording sales of products that are out on consignment
C) Recording sales based on F.O.B. shipping point
D) Recording revenues of other companies by acting as a middleman

Question

Quizplus · Accepted Answer

Recording sales based on F.O.B. shipping point is a legitimate accounting practice and does not constitute fraud. F.O.B. shipping point means that ownership of goods transfers to the buyer at the point of shipment, and revenue is recognized when the goods are shipped. However, options A, B, and D involve fraudulent practices that result in overstatement of revenues.

Which of the Following Is Not a Fraud Method to Overstate