Which of the following would overstate a company’s net income?
A. Counting shipments of customers’ orders as revenue before payment has been received.
B. Shipping goods to customers without receiving orders from those customers, and recording the transactions as revenue.
C. Accruing liabilities for marketing expenses before they are incurred.
D. Making an accrual adjusting entry for interest earned on a bond investment.
Answer:B
Which of the following would overstate a company’s net income?
A. Counting shipments of customers’ orders as revenue before payment has been received. B. Shipping goods to customers without receiving orders from those customers, and recording the transactions as revenue. C. Accruing liabilities for marketing expenses before they are incurred. D. Making an accrual adjusting entry for interest earned on a bond investment.