Special Sales Considerations Roadway Motor Homes manufactures an exclusive line of motor homes purchased primarily by corporate executives and country and western stars. Roadway sells its motor homes to dealers who then sell the units to customers. Because its motor homes are very expensive and its customers are quite demanding, Roadway offers all purchasers the right to return their motor homes within 30 days of delivery for a full refund. Of the 1,420 units sold last year, only 12 units were returned by customers and 8 of the customers purchased more expensive units. Explain your answers for each of the following:

a. Does the existence of the return privilege mean that Roadway should not record a sale until 30 days after delivery?

b. Should Roadway record a sale when the motor home is delivered to the dealer or when the dealer sells the motor home?

c. Roadway is considering extending the number of sales outlets by providing units to selected dealers on a consignment basis. How does the consignment process differ from that presently in use? At what point should Roadway recognize a sale for units placed on consignment?

d. Why is the time at which a sale is recognized of special importance in the financial reporting process?