Werribee Direct Ltd is a mail order company that allows its customers to order online and return the goods without obligations.Werribee Direct Ltd had experienced a high ratio of returned merchandise from online sales.What is the appropriate accounting treatment for this sale that is in accordance with IASB (2011)Revenue?
A) Record the sale only when the option to return has expired.
B) Record the sale and reduce this by an estimate of future returns.
C) Record the sale and account for returns as they occur.
D) Record the sale as deferred revenue and recognise revenue progressively until expiry of the option.

Question

Quizplus · Accepted Answer

The Answer of Werribee Direct Ltd is a mail order company that allows its customers to order online and return the goods without obligations.Werribee Direct Ltd had experienced a high ratio of returned merchandise from online sales.What is the appropriate accounting treatment for this sale that is in accordance with IASB (2011)Revenue?
A) Record the sale only when the option to return has expired.
B) Record the sale and reduce this by an estimate of future returns.
C) Record the sale and account for returns as they occur.
D) Record the sale as deferred revenue and recognise revenue progressively until expiry of the option.

Werribee Direct Ltd Is a Mail Order Company That Allows