A company that ships a large quantity of its products from its manufacturing plant to a warehouse that it leases until t...
A company that ships a large quantity of its products from its manufacturing plant to a warehouse that it leases until the customer is ready for the product should record the delivery as revenue.
True
False
Homework Answers
Ans. : According to AS 9 i.e. Revenue recognition, revenue is recognised when all the risk and reward have been transferred.
In this case, company ships products from manufacturing unit to warehouse that it leases ( agreement to use assets for fixed period of time in return of rent).
Since customer is not ready for the product therefore, company should not record the delivery as revenue.
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