Boomerang Computer Company sells computers with an unconditional right to return the computer if the customer is not satisfied. Boomerang has a long history selling these computers under this returns policy, and can provide precise estimates of the amount of returns associated with each sale. Boomerang most likely should recognize revenue:
A) When Boomerang delivers a computer to a customer.
B) When Boomerang receives cash from the customer.
C) When a customer returns a computer.
D) Never, because the right of return is unconditional.Returns can be estimated at delivery, so an allowance can be created and revenue recognized at that point.
Correct Answer:
Verified
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