Which of the following statements does not describe the way a company might use vendor allowances?
A)A supplier gives a company a vendor allowance for something they will buy in the future,allowing the company to meet their target revenue for the quarter
B)Vendor allowances are recorded as revenue at the end of the quarter,even though the inventory purchase will not be made until the following quarter,allowing the company to meet revenue targets for the quarter
C)When companies need to make quarterly revenue targets set by management or Wall Street analysts,they ask a supplier to give them a vendor allowance
D)Vendor allowances allow an exchange of assets at a predetermined date so as to minimize distortion of the financial statements

Question

Quizplus · Accepted Answer

Vendor allowances typically involve financial incentives provided by suppliers to the purchasing company, such as discounts or rebates, which can be used to meet revenue targets or reduce the cost of goods sold. They do not involve an exchange of assets at a predetermined date to minimize distortion of financial statements; instead, they are more directly related to transactions between the company and its suppliers to impact the company's financial performance.

Which of the Following Statements Does Not Describe the Way