Hi, Sir. I would like to ask a question. Could you please help to explain this question? I don’t quite understand this question.
When sales are made with a right of return, the company
A) should not recognize any revenue.
B) should recognize revenue for the full sales price.
C) records the returned asset in a separate inventory account.
D) record the estimated returns in the Sales Returns account.
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Revenue
3y ago#1Hi,
This is looking at the third step as part of recognising revenue where we look at determining the transaction price.
The transaction price is the amount we expect to receive. Have a look at the question again now and see if you can work it out.
Let me know your answer and I can then help you further if required..
Thanks
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