If a Company Sells Its Product but Gives the Buyer

question 39

Multiple Choice

If a company sells its product but gives the buyer the right to return the product, revenue from the sales transaction should be recognized at the time of sale under the earnings approach if

• A)the market for returnable goods is untested.
• B)the amount of goods returned is high.
• C)there is a transfer of the risks and rewards of ownership.
• D)the amount of future returns can be reasonably estimated.

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Definitions:

Tofranil

A brand name for imipramine, a tricyclic antidepressant used to treat depression and certain anxiety disorders.

Edema

An accumulation of fluid in the tissues, causing swelling, often as a result of inflammation or injury.

Pyelonephritis

A type of urinary tract infection that affects one or both kidneys.

Glomerulonephritis

An inflammation of the tiny filters in the kidneys (glomeruli), which can affect kidney function.