Company management is often under pressure to increase revenue and/or net income. One approach is to use a "bill and hold" arrangement. This is an example of which of the following?
A) adjustments to revenue accounts
B) fictitious revenue recorded
C) premature revenue recognized
D) alteration of cutoff documents

Question

Quizplus · Accepted Answer

"Bill and hold" arrangements involve recognizing revenue before products have been delivered or accepted by the customer. This is a form of premature revenue recognition, which can be used to artificially inflate revenue and net income. It is not an adjustment to revenue accounts, fictitious revenue, or alteration of cutoff documents.

Company Management Is Often Under Pressure to Increase Revenue And/or