The most important issue in this situation is defining what exactly revenue recognition is. In order to recognize the revenue, not only does a deal have to be agreed on, but also a service has to be provided. In this context, it is talking about one million dollars worth of merchandise. However, since the buyer does not have sufficient room the sale can not go through. While it may be scary to leave a million-dollar sale in limbo for two weeks it is the right thing to do. If something were to happen to the merchandise, the sale would be voided anyway and could lead to a lot more legal issues. Plus, a big sale at the beginning of the year is a great way to start the new financial quarter. Waiting the two weeks is the right and ethical thing to do.

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