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Acct 403 - Chapter 10 - set 1
arrangements used to alter the terms and conditions of recorded sales in order to entice customers to accept delivery of goods
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.