EXERCISE 6–1 5. In October, a company shipped a new product to retailers. Which one of the following conditions would prohibit immediate recognition of revenue?

a. Terms of the sale require the company to provide extensive promotional materials to retailers before December 1.

b. Retailers are not obligated to pay the purchase price until February, after their holiday sales are collected.

c. On the basis of past performance, reliable estimates are that 20% of the product is returned.

d. The company is unable to enforce agreements concerning discounting of the retail sales of the product.