When a company sells a product but gives the buyer the right to return it, revenue should not be recognized until the sale is collected.

Name: When a company sells a product but gives the buyer the right to return it, revenue should not be recognized until the sale is collected.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Revenue can be recognized at the time of sale if the company can reasonably estimate the returns and has a reliable method to account for them, according to the revenue recognition principle.

When a Company Sells a Product but Gives the Buyer