Which of these overestimates of revenue can occur within the accounting standards?
A)Shipping goods prematurely to buyers without a firm order and recognising revenue when the goods are shipped
B)Making estimates which later prove to be over-optimistic
C)Backdating sales made during the early part of the new accounting period to the last part of the old accounting period
D)A and B can occur within the accounting standards

Question

Quizplus · Accepted Answer

Making estimates which later prove to be over-optimistic can occur within the accounting standards, as estimates are a necessary part of accounting for revenues and expenses. However, these estimates must be based on reasonable and supportable assumptions.

Which of These Overestimates of Revenue Can Occur Within the Accounting