SELLING MERCHANDISE WITH RIGHT OF RETURN. Jambox Corporation sells records, tapes, and CDs to retail stores. Sales of Jambox’s products are unpredictable. Therefore, for up to one year after shipping, J ambox accepts unlimited returns from retailers.
REQUIRED:
Should Jambox record sales and receivables when products are shipped to retailers, or wait to record sales and receivables until retailers sell the products? (Hint: Read paragraphs 6 and 8 of Statement of Financial Accounting Standards No. 48.)