GAAP Specifies That for a Seller to Record Revenue at Time

question 58

Multiple Choice

GAAP specifies that for a seller to record revenue at time of sale when right of return exists the following conditions must be met except:

• A)The seller's price to the buyer is substantially fixed or determinable at the date of sale.
• B)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.
• C)The buyer's obligation to the seller does not change in the event of theft or physical destruction or damage of the product.
• D)The buyer is a special purpose entity established by the seller for the sole purpose of buying and reselling the seller's product.

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Definitions:

Strategic Contingency

The concept that organizational strategies must be adaptable to current and foreseeable conditions to ensure effectiveness.

Crucial Impact

A significant effect or influence that is essential to the outcome or success of a process or event.

Key Product

A product that is crucial to a company's success, often contributing significantly to its revenue and brand identity.

Strategic Contingencies

Critical factors that organizations must address to adapt and succeed in a changing environment.