If XYZ goes ahead and secures the backdated order and recognizes it as a bill and hold sale, which of the following is correct?

(a) This would cause operating income to exceed CFFO by \($10,000\.

(b) This would cause CFFO to be \($6,000\) smaller than operating income.

(c) This would have the same effect on both operating income and CFFO.

(d) This would have no effect on operating income but would increase CFFO by \($6,000\.

Use the following data

XYZ Company has finalized its financial statements for its fiscal year ended December 31. At this stage, all of its transactions have been recorded properly in terms of GAAP. On January 10, XYZ Company is considering securing a back-dated order for a bill and hold sale from one of its customers.

The back-dated order would be for goods with a selling price of \($10,000\) and a cost of \($4,000.\) The goods would be delivered on February 28, two months after the year end. The order would be back-dated as though it were placed on December 28.