Question: Many firms recognize revenues at the point of shipment This
Many firms recognize revenues at the point of shipment. This provides an incentive to accelerate revenues by shipping goods at the end of the quarter. Consider two companies, one of which ships its product evenly throughout the quarter, and the second which ships all its products in the last two weeks of the quarter. Each company’s customers pay thirty days after receiving shipment. Using accounting ratios, how can you distinguish these companies?
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