A negative consequence of recording byproducts in the accounting records when the sale occurs is that ________.
A) the revenue from the byproducts is usually fairly large and the accounting records will be distorted
B) earnings cannot be timed under this method
C) managers can be tempted to stockpile byproducts
D) it involves complex calculations compared to the production method

Question

Quizplus · Accepted Answer

Recording byproducts at the time of sale can lead managers to stockpile byproducts to manipulate earnings, as they might delay sales to show higher profits in a particular period.

A Negative Consequence of Recording Byproducts in the Accounting Records