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Identify and Explain Potential Revenue Recognition Issues Relating to the Following

Question 32

Essay

Identify and explain potential revenue recognition issues relating to the following operations:
A. Motor Bikes, Inc. is a store that sells second-hand motorcycles on consignment from sellers. It remits to the sellers the sale price less the commission.
B. 1-800-MyFlowers is an internet flower store. It receives fees in advance to provide flowers all year long.

Correct Answer:

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A. This company doesn't take title to th...

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