Acct 403 - Chapter 10 - set 1

5 terms by mfugetta

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side agreements

arrangements used to alter the terms and conditions of recorded sales in order to entice customers to accept delivery of goods

channel stuffing

arrangements that entice customers to buy substantially more inventory than they can promptly sell

bill and hold sales

arrangements where customers agree to purchase goods, but the seller retains physical possession until the customer requests shipments

parked inventory schemes

are bill and hold sale arrangements

Why is it that revenue should NOT be recognized for sales with bill and hold arrangements?

Since delivery of goods has not occurred, bill and hold arrangements do not qualify as a sale, and therefore, revenue should not be recognized.

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