USGAAP Does Not Allow Sellers of Merchandise to Recognize Revenue

question 66

Multiple Choice

U.S.GAAP does not allow sellers of merchandise to recognize revenue from sales when the customers have the right to return goods.

• A)unless the firm can reasonably estimate the amount of returns.
• B)unless the firm uses an allowance method to do so.
• C)unless the firm can reasonably estimate the amount of returns and uses an allowance method to do so.
• D)none of the above.
• E)all of the above.

---

Definitions:

Spending Variance

The difference between the actual amount spent and the budgeted or expected amount, used in budgeting and financial planning.

Cleaning Equipment

Hardware and machinery used specifically for the purpose of cleaning and maintaining cleanliness in various settings.

Flexible Budget

A budget that is conceived to flex with variations in activity scale or volume.

Selling

The process involved in promoting and transferring ownership of a product or service to a customer in exchange for payment.