Several years a ago a medical device company was charged

Assignment Help Accounting Basics

Reference no: EM13586356

Several years a ago, a medical device company was charged with improperly recognizing approximately $1.5 million in revenue from bill-and hold transactions. One distributor placed orders with the medical device company for a total of approximately 15,000 units of a particular product in April and July. As part of the agreement with the distributor, the medical device company invoiced the distributor in September for the total 15,000 units for more than $500,000 in September, but held the product at its refrigerated facility until the distributor requested the product, which did not occur until March the following year. Yet, the company still recorded the revenue in the previous year.

1. What accounts would this fraudulent transaction affect?

2. What could an auditor do to discover the nature of the relationship between the company and its distributor regarding these products?

Reference no: EM13586356

Questions Cloud

Compute the revenue to be recognized in fiscal year 2014 : van hatten industries has three operating divisions-depp construction division dement publishing division and ankiel

Which of the following is the salt in the br nsted-lowry : question 1 which of the following best summarizes the main causes of water pollution today?increased runoff driving

Algood and gaw began a partnership on january 2 of the : algood and gaw began a partnership on january 2 of the current year. algood invested cash of 150000 as well as

Costello corporation manufactures a single product the : costello corporation manufactures a single product. the standard cost per unit of product is shown below. direct

Several years a ago a medical device company was charged : several years a ago a medical device company was charged with improperly recognizing approximately 1.5 million in

A professional emergency responder should be concerned : consider a van parked in a lot outside a professional football stadium in atlanta ga on a sunday afternoon. one ounce

Gale gordon cpa has found ratio and trend analysis : gale gordon cpa has found ratio and trend analysis relatively useless as a tool in conducting audits. for several

Chao corporation uses the accounts receivable aging method : chao corporation uses the accounts receivable aging method to account for uncollectible accounts expense. as of

Feather friends inc distributes a high-quality wooden : feather friends inc. distributes a high-quality wooden birdhouse that sells for 80 per unit. variable expenses are

User Account

All Pages