ACC305_Week2_Assignment2

ACC305_Week2_Assignment2 - SFAS No. 48 Research Case 5-9:...

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SFAS No. 48 1 Research Case 5-9: SFAS No. 48
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SFAS No. 48 2 Research Case 5-9: SFAS No. 48 The FASB statement of financial accounting standards number 48, deals with revenue recognition when the right of return exists. This accounting standard basically states that, when the right of return exists, in order to recognize revenue at the time of sale certain conditions must be met; whether or not the sales of a company meet these conditions will determine the revenue recognition principle that the company uses. There are six criteria to be met when the right of return exists before any revenue can be recognized. Statement number 48 lists these criteria as: a) The seller's price to the buyer is substantially fixed or determinable at the date of sale. b) The buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product. c) The buyer's obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product.
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This note was uploaded on 08/14/2011 for the course ACC 305 taught by Professor B.forde during the Spring '11 term at Ashford University.

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ACC305_Week2_Assignment2 - SFAS No. 48 Research Case 5-9:...

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