Question: 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

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?

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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 full answer

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