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Earnings Management & Revenue Recognition

Is earnings management always intended to produce higher income? Explain

Explain and justify why revenue often is recognized as earned at point of delivery.

Explain in what situations it would be useful to recognize revenue as the productive activity takes place.

At what times, other than those included in the above answers, may it be appropriate to recognize revenue?

Solution Summary

I have given you guidance on why earnings management can increase or decrease earnings, why delivery is a common trigger point for recognizing revenue, and discussed expectations when you recognize revenue at points other than delivery. Your response is 279 words in everyday language suitable for a novice to intermediate.