Recognizing revenues without shipping would lead to ________ gross margins and _______ accounts receivable turnover in days.
A)increased; low
B)decreased; low
C)increased; high
D)decreased; high

Question

Quizplus · Accepted Answer

Recognizing revenues without shipping would lead to increased gross margins because revenue is recorded without the associated cost of goods sold. It would also lead to low accounts receivable turnover in days because the revenue is recognized before cash is collected, increasing the accounts receivable balance and reducing the turnover rate.

Recognizing Revenues Without Shipping Would Lead to ________ Gross Margins