Question
AAA Ltd sells and delivers goods to XXX Ltd on 13 March. Both parties agree that XXX Ltd will hold the goods on consignment to
AAA Ltd sells and delivers goods to XXX Ltd on 13 March. Both parties agree that XXX Ltd will hold the goods on consignment to be sold to third parties. XXX Ltd is not required to pay AAA Ltd for the goods until they are sold to a third party. Which of the following statements is incorrect?
a.
AAA Ltd retains the risks and rewards of ownership of the goods after delivery to XXX Ltd.
b.
At the time of delivery of the goods to XXX Ltd there is no probability that future economic benefits will flow to AAA Ltd.
c.
AAA Ltd does not recognise any revenue until XXX Ltd has on-sold goods to a third party.
d.
AAA Ltd recognises revenue on 13 March for the sale of goods to XXX Ltd.
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