Examples of fraud involving improper revenue recognition include:
A)recording revenue before performing the services required.
B)channel stuffing.
C)sales to nonexistent customers.
D)all of the above

Question

Quizplus · Accepted Answer

All of the options listed involve improper revenue recognition. Recording revenue before performing the services required (option A) is premature recognition of revenue. Channel stuffing (option B) involves intentionally sending more products to distributors than they can sell in order to artificially inflate revenue. Sales to nonexistent customers (option C) is fictitious revenue where the company books revenue for a nonexistent sale.

Examples of Fraud Involving Improper Revenue Recognition Include