A sale should, not be recognized as revenue by the seller at the time of sale if
A) payment was made by cheque.
B) the selling price is less than the normal selling price.
C) the buyer has a right to return the product and the amount of future returns cannot be reasonably estimated.
D) the buyer cannot return the product unless there it is defective, which rarely occurs.

Question

Quizplus · Accepted Answer

Revenue recognition criteria require that the seller can reasonably estimate returns. If the seller cannot estimate the amount of future returns, it does not meet the criteria for revenue recognition at the time of sale.

A Sale Should, Not Be Recognized as Revenue by the Seller