Vroom just began selling chainsaws with a three-year right-to-return policy, starting from the date of...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Vroom just began selling chainsaws with a three-year right-to-return policy, starting from the date of the purchase. Since this is a new policy, the company has had no experience with the policy and cannot accurately estimate returns. What is the longest period of time that Vroom may have to wait before recognizing revenue associated with one of these sales?
Multiple Choice
No time delay, recognize revenue upon delivery.
Vroom should recognize revenue as cash is received.
Vroom should defer revenue recognition until costs are recovered.
Three years, after the right of return has expired.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
