Soorya Manufacturing makes educational toys that are sold to retailers on the following contractual terms: Each type of toy has a fixed wholesale price, is shipped F.O.B. shipping point, and payment is due 45 days after the shipment. The retailer may return a maximum of 45% of an order at the retailer's expense up to 6 months after delivery. Sales are made only to retailers that have a good credit rating.
Required:
a)Identify at least four different revenue recognition points that Soorya could use for its sales.
b)What revenue recognition criteria should Soorya use to determine when revenue should be recorded?

Question

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The Answer of Soorya Manufacturing makes educational toys that are sold to retailers on the following contractual terms: Each type of toy has a fixed wholesale price, is shipped F.O.B. shipping point, and payment is due 45 days after the shipment. The retailer may return a maximum of 45% of an order at the retailer's expense up to 6 months after delivery. Sales are made only to retailers that have a good credit rating.
Required:
a)Identify at least four different revenue recognition points that Soorya could use for its sales.
b)What revenue recognition criteria should Soorya use to determine when revenue should be recorded?

Soorya Manufacturing Makes Educational Toys That Are Sold to Retailers