On June 1^st, Joseph & Company received a $500 deposit for 80 cases of wine. On June 10^th the customer identified specific vintages that are included in Joseph's inventory, and asked that Joseph not ship the wine until June 20 so the customer could ready space to store the wine, so Joseph set those wines aside for the customer, boxed and ready for shipment to the customer. On June 20^th the wine was shipped and delivered to the customer. Joseph likely would recognize revenue on

Question

Quizplus · Accepted Answer

Bill-and-hold arrangements normally do not qualify for revenue recognition until delivery is made to the customer. Prior to that point, control of goods is not viewed as having passed to the customer. However, sellers can recognize revenue prior to delivery if it is concluded that the customer controls the product (the customer specifically identified the goods), there is good reason for the bill-and-hold arrangement (the customer needed time to make space for the wine), and the product is specifically identified as belonging to the customer and is ready for shipment (Joseph has a good faith deposit, the customer selected the goods, the goods were prepared for shipment and set aside from regular goods for sale).

On June 1st, Joseph & Company Received a $500 Deposit

On June 1^st, Joseph & Company Received a $500 Deposit