Boomerang Computer Company Sells Computers with an Unconditional Right to Return

question 106

Multiple Choice

Boomerang Computer Company sells computers with an unconditional right to return the computer if the customer is not satisfied. Boomerang has a long history selling these computers under this returns policy, and can provide precise estimates of the amount of returns associated with each sale. Boomerang most likely should recognize revenue:

• A)When Boomerang delivers a computer to a customer.
• B)When Boomerang receives cash from the customer.
• C)When a customer returns a computer.
• D)Never, because the right of return is unconditional.Returns can be estimated at delivery, so an allowance can be created and revenue recognized at that point.

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Definitions:

Scots

People originating from Scotland, a country in the northern part of the United Kingdom, known for its rich history and distinct cultural heritage.

Pietism

A movement within Lutheranism that began in the 17th century, focusing on personal faith, the need for a 'new birth', and the importance of a devout and pious life.

Evangelization Process

The spreading of the Christian gospel by public preaching or personal witness, often associated with missionary work.

Cotton Mather

A New England Puritan minister, prolific author, and pamphleteer, best known for his role in the Salem witch trials in the late 17th century.