Solved

On December 1, 2021, SuperTech Sold 100 Locks for Laptop

Question 40

Multiple Choice

On December 1, 2021, SuperTech sold 100 locks for laptop computers at $50 each with a 90-day unconditional right of return. Since this is a new product for SuperTech, it has no past history regarding estimated returns. Which of the following is TRUE regarding SuperTech's December 31, 2021 financial statements?


A) Sales of $5,000 should only be recognized in 2022 when the return privilege expires.
B) Sales of $5,000 should be recognized in 2021 as long as there is a reserve for returns.
C) Sales of $5,000 should be recognized in 2021, with future costs accrued as an estimated liability.
D) Sales should only be recognized as the related cash is collected.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents