Question
Crandall Well Drilling Supplies Co. has a standard contract for sales of goods. Crandall sales executive negotiated a large order with a key customer. To
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Crandall Well Drilling Supplies Co. has a standard contract for sales of goods. Crandall sales executive negotiated a large order with a key customer. To place the large order, the customer demanded special terms and conditions, including special rights of return. The special terms and conditions were memorialized in a side letter to the standard contract. The side letter and the standard contract were forwarded to the accounting department who evaluated all the terms and conditions in determining the proper revenue to be recognized.
When Pam, the auditor, saw the side agreement, she concluded that it was improper because it was a side agreement with unusual terms and conditions. Is Pam correct?
Yes
No
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