Aggressive Revenue Recognition, Part 2

Aggressive revenue recognition occurs when companies (a) prematurely recognize revenue or (b) recognize bogus sales.

Here are some ways companies have recognized bogus revenue:
(1) shipping product the customer didn't order
(2) shipping empty boxes to customers
(3) relaxing the credit policy and making sales to people who can't pay
(4) recognizing revenue when the product has been consigned
(5) bill-and-hold sales
(6) recognizing revenue for sales of nonexistent inventory
(7) recognizing revenue for transactions that lack commercial substance
(8) grossing up revenue
(9) boomerang transactions
—
Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world.
—
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS:
• A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING
• A 44-PAGE GUIDE TO U.S. TAXATION
• A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS
• MANY MORE FREE PDF GUIDES AND SPREADSHEETS
—
SUPPORT EDSPIRA ON PATREON
—
GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT
—
LISTEN TO THE SCHEME PODCAST
—
GET TAX TIPS ON TIKTOK
—
ACCESS INDEX OF VIDEOS
—
CONNECT WITH EDSPIRA
—
CONNECT WITH MICHAEL
—
ABOUT EDSPIRA AND ITS CREATOR

[Jack-vmfg]

The content of these videos is better than what you get at most universities. Thank you.

[divyakuppili]

Can't thank you enough for sharing these lectures. They have been of great help for my MBA. In the case of Bogus Sales, how do they manipulate the inventory numbers? Could you please explain or point me to a video on your channel.