Fictitious revenues
A) increase accounts receivable turnover.
B) understate the gross margin percentage.
C) lower accounts receivable turnover.
D) have no impact on the gross margin percentage.

Question

Quizplus · Accepted Answer

Fictitious revenues would artificially inflate sales figures without a corresponding increase in cash or receivable collections, thus reducing the accounts receivable turnover ratio, which measures how often a company collects its receivables over a period.

Fictitious Revenues