The Motley Fool has a good article (free registration required) on recognizing revenue tricks. They use the example of Sunbeam in the mid 90s, which recognized revenue months before it should have been recorded. Any sane CEO would have seen the long-term risk this posed, but I guess Al Dunlap just wanted to inflate the numbers then get the hell out.
The main point for managers – manager your cash flow not your net income. The main point for investors – watch the cash flow statement. If net income continually exceeds cash from operations, it's an automatic red flag.
