Which of the following is not a condition that must be present for a company to recognize revenue at the time of sale when the company gives the buyer the right to return the product?
A) The buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product.
B) The present value of the future returns can be reasonably estimated.
C) The seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer.
D) The seller's price to the buyer is substantially fixed or determinable at the date of sale.

Question

Quizplus · Accepted Answer

The correct condition that does not need to be present for a company to recognize revenue at the time of sale, even when the buyer has the right to return the product, is that the present value of the future returns can be reasonably estimated. Revenue recognition principles focus on the transfer of control and risks and rewards of ownership, not on the ability to estimate future returns' present value.

Which of the Following Is Not a Condition That Must