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Recognizing something as a revenue instead of as a liability has a positive effect on the reported financial statements because:

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ayfat23

Revenue and liability has influence on reported financial statements because;

  • it understates liabilities
  • it overstates revenues

What is revenue and liability?

Revenue serves as the money that is been generated by the company as a profit while a liability serves as future sacrifices of economic benefits.

However, recognizing something as revenue instead of liability is dangerous because it can results in overstated net income.

Learn more about revenue at;

https://brainly.com/question/25855858

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