If the right of return exists, which of the criteria below would suggest that the revenue recognition be deferred?
A)The seller does not have an obligation for future sales assistance.
B)The buyer's obligation to the seller would be changed by theft or damage to the product.
C)The amount of future returns can be reasonably estimated.
D)The buyer has economic substance apart from the seller.

Question

Quizplus · Accepted Answer

If the buyer's obligation to the seller would be changed by theft or damage to the product, it suggests uncertainty in the transaction, which may require deferring revenue recognition until the uncertainty is resolved.

If the Right of Return Exists, Which of the Criteria