How to manipulate Sales figure ? Lets check it quickly

1.       Recording revenue before completing material obligations under the contract

2.       Recording revenue far in excess of work completed on the contract

3.       Recording revenue before the buyer’s final acceptance of the product

4.       Recording revenue when the buyer’s payment remains uncertain or unnecessary

5.       Recording revenue from transactions that lack economic substance (In these transactions, the so-called customer is either under no obligation to keep or pay for the product, or no product or service was even transferred in the first place)

6.        Recording revenue from transactions that lack a reasonable arm’s length process (While recognizing that revenue on transactions that lack economic substance should never be considered legitimate, transactions that lack a reasonable arm’s-length the process is sometimes appropriate. But prudent investors should bet against it. That is most related-party transactions that lack an arm’s length exchange produce inflated, and often phony, revenue. Example: Transactions Involving Sales to an Affiliated Party)

7.        Recording revenue on receipts from non-revenue-producing transactions (Bogus revenue arises from the misclassification of cash received from non-revenue-producing activities. Investors understand that not all cash received necessarily would be revenue or even directly pertain to the company’s core operations).

8.       Recording revenue from appropriate transactions, but at inflated amounts (Excessive or misleading revenue might result from (1) using an inappropriate methodology to recognize revenue and/or (2) grossing up revenue to make a company appear much larger than it really is ).