Which of the following depicts the practice that suppliers use to encourage customers to buy extra inventory so as to increase current-year sales?
a. Kiting
b. Channel stuffing
c. Redating transactions
d. Partial shipments
b
FEEDBACK: a. Incorrect. Kiting is a practice where cash receipts are misapplied to hide fictitious receivables.
b. Correct.
c. Incorrect. Redating or refreshing transactions involve changing sale dates to more current time periods to prevent them from being deemed uncollectible or bad debts.
d. Incorrect. Partial shipment schemes involve recording the full amount of a sale when only part of the sale was shipped.
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