Under the provisions of FASB ASC 606, when a customer purchases a product but is not yet ready for delivery, this is referred to as
A) A repurchase agreement
B) A consignment
C) A principal-agent relationship
D) A bill-and-hold arrangement

Question

Quizplus · Accepted Answer

When a customer purchases a product but is not yet ready for delivery, it is referred to as a bill-and-hold arrangement under the provisions of FASB ASC 606. In this arrangement, the customer agrees to purchase the product, but requests that the seller hold onto it until the customer is ready to receive it. This arrangement requires specific criteria to be met in order for revenue to be recognized, including that the product must be identified separately as belonging to the customer, the product must be ready for delivery, and the request for the hold must be requested by the customer.

Under the Provisions of FASB ASC 606, When a Customer