Under IFRS, Where a Right to Return Exists

question 52

Multiple Choice

Under IFRS, where a right to return exists,

• A) sales returns and allowances are recognized as contra accounts to Revenues and Accounts Receivable.
• B) a refund liability is recognized.
• C) this right is disclosed in the financial statements; no accrual necessary.
• D) this right does not need to be disclosed or accrued anywhere.