Company management is often under pressure to increase revenue and/or net income. One approach is to use a "bill and hold" arrangement. "Bill and hold" is an example of which of the following?
A) significant accounting estimates
B) fictitious revenue recorded
C) premature revenue recognized
D) alteration of cutoff documents

Question

Quizplus · Accepted Answer

"Bill and hold" arrangements involve recognizing revenue before the delivery of goods to the customer, which can lead to premature revenue recognition. This is because revenue is recognized before the fulfillment of all revenue recognition criteria, particularly the transfer of control of goods to the customer.

Company Management Is Often Under Pressure to Increase Revenue And/or