A common form of data manipulation consists of reporting sales revenue near the end of a financial reporting period, even though the actual sales transactions will not be completed until the following period. This practice is referred to as:
A) Gamesmanship.
B) Behavioral displacement.
C) Falsification.
D) Smoothing.

Question

Quizplus · Accepted Answer

This practice is referred to as "smoothing," which involves manipulating financial data to make earnings appear more stable and less volatile than they actually are. Reporting sales revenue before the actual sales transactions are completed to meet financial targets or expectations is a form of earnings management, often aimed at smoothing income over periods.

A Common Form of Data Manipulation Consists of Reporting Sales