Question: ABC Software Systems has multi-year service contracts with its customers. As such a proportion of the fees for these services are treated as unearned revenue

ABC Software Systems has multi-year service contracts with its customers. As such a proportion of the fees for these services are treated as unearned revenue on the balance sheet. If ABC treats all these fees as revenue in year one, what type of scheme is being perpetrated?

A. Liability understatement

B. Revenue understatement

C. Cost of goods sold understatement

D. Assets overstatement

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Hello need help for my financial statement analysis assignment, I attached 2 files, one for the requirement and the other one is the company financial statements we need to analyse. A01-16-0005...

Financial Statement analysis - Homework case number 4. Accounting for Software Revenue Recognition Is Computer Associates Being Too Aggressive? Annual Revenues at Computer Associates (CA) dropped...

Can you continue making the VRIO framework and describe its resources and capabilities in the 4 functional areas of management? Resources Valuable Rare Inimitable Well-Organized 7-3 "By selling...

1. Make a PESTLE Analysis of Opportunities and Threats 2. Make a Porter's 5 Forces of Competitive Advantage 3. Make an EFE Matrix Analysis 4. Make an internal analysis sing the VRIO framework. 5....

please explain those questions in detail, thanks! Thinking Nathalie Johnstone, Brandy Mackintoch, and Fred Phillips ABSTRACT: Tis instructional case requires atuleria to provide aswice to a clent...

I need help for those question . E4.16 E18.4 E19.7 P22.4 E23.4 E18.10 E22.10 CHAPTER 4 EXERCISES: SET B E4-1B The trial balance columns of the worksheet for Lamar Company at June 30, 2017, are as...

Financial information attached. I'm supposed to project for 2015, 2016, and 2017. I do not understand the question or how to do it. Pro-Forma Financial Statements (I/S, B/S and Statement of Cash...

View the 2013 Annual Report for the Ford Motor Company, a Fortune 50 company, linked here as well as on the Course Information page. Using this report, answer the following questions: Does the...

Question 3 (a) Compute the 2014 inventory turnover ratio and the days in inventory ratio. Note: what Groupon calls finished goods inventory is really merchandise inventory. Further, these...

The Receiving Department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $ 15,000 per year. The forklift is used only for unloading. The...

How does FNMA differ from GNMA?

4 Bequired information [ The following informabion applies to the questions diypipyed below ] Biack Diamond Company produces snowboerts. Fech snowboed reoures 1 pounds of carbon floec. Management...

Determine the major differences between U.S. GAAP and IFRS disclosure reporting requirements related to each separately reportable operating segment. Next, give your opinion as to whether either U.S....