A company sends 10,000 units of its products to one of its customers on December 28, Year
Question:
A company sends 10,000 units of its products to one of its customers on December 28, Year One. The customer has a right to return any of this merchandise within 6 months for a full refund. Does the company want to record this transaction as a sale in Year One. Which of the following is most likely to necessitate that the recording of the transaction as a sale be delayed until Year Two?
a. The company can make a reasonable estimation that 25 percent of the units will be returned.
b. Return of the goods is not contingent on resale.
c. If the goods are stolen from the customer, the obligation is not affected.
d. The company cannot make a reasonable estimation of the number of units that will be returned.
Intermediate Accounting
ISBN: 978-1118742976
16th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield