Out of Africa,a multi-national corporation,was having a very bad year.Management decided to record all shipments made to customers in the first two weeks of the next year as sales in the current year.Management is ________.

Question

Quizplus · Accepted Answer

Recognizing revenue too early means recording sales that have not yet been made, which is a violation of the principle of revenue recognition. This action is unethical and misleading and may result in the overstatement of profits and financial performance of the company.

Out of Africa,a Multi-National Corporation,was Having a Very Bad Year