Purchase order between Barneys & Fred for vacuums. Terms are n/90. Barneys obtains legal rights to goods at the point of delivery.

Barneys is not allowed to discount the vacuums to its customers to help move inventory through its warehouses; however, the agreement allowed Barneys to return any unsold product within 90 days of purchase.

What is the revenue recognition issue? 

Answer rating: 100% (QA)

The revenue recognition issue in this scenario is related to the timing of recognizing revenue from the sale of vacuums by Barneys The key concern ari... View the full answer