A company that ships a large quantity of its products from its manufacturing plant to a warehouse that it leases until the customer is ready for the product should record the delivery as revenue.

Question

Quizplus · Accepted Answer

Revenue should not be recorded until the product is delivered to the customer. Delivery to the warehouse is not the same as delivery to the customer. The company should instead record the shipment as inventory until it is sold or delivered to the customer.

A Company That Ships a Large Quantity of Its Products