What is often referred to as "abusing the cutoff?"
A) Inflating revenues by using implied side agreements
B) Inflating revenues by selling unused assets for a promise to buy them or similar assets back at roughly the same price
C) Inflating current revenues by allowing customers to return products and cancel sales in future periods
D) Inflating revenues by including revenues in the current period that should be recognized in the next period

Question

Quizplus · Accepted Answer

Abusing the cutoff is the practice of recording revenues in the current period that should be recognized in the next period. This can artificially inflate current period revenue and make the company appear more financially stable than it actually is.

What Is Often Referred to as "Abusing the Cutoff