Which of the following is a highly suspicious financial statement relationship?
A) Increased revenues with decreased receivables
B) Decreased production with decreased scrap
C) Increased volume with increased scrap
D) Decreased cost per unit with increased level of output

Question

Quizplus · Accepted Answer

Increased revenues with decreased receivables is highly suspicious because it suggests that a company is recognizing revenue without a corresponding increase in cash or receivables, which could indicate improper revenue recognition practices.

Which of the Following Is a Highly Suspicious Financial Statement