Multiple Choice
On December 1,2018,SuperTech sold 100 locks for laptop computers at $50 each with a 90-day unconditional right of return.Since this is a new product for SuperTech,it has no past history regarding estimated returns.Which of the following is TRUE regarding SuperTech's December 31,2018 financial statements?
A) Sales of $5,000 should only be recognized in 2019 when the return privilege expires.
B) Sales of $5,000 should be recognized in 2018 as long as there is a reserve for returns.
C) Sales of $5,000 should be recognized in 2018,with future costs accrued as an estimated liability.
D) Sales should only be recognized as the related cash is collected.
Correct Answer:
Verified
Correct Answer:
Verified
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