Under the Earnings Approach, If a Company Sells Its Product

Multiple Choice

Under the earnings approach, if a company sells its product but gives the buyer the right to return the product, revenue from the sales transaction should be recognized at the time of sale if

A) the market for returnable goods is untested.
B) there is a transfer of the risks and rewards of ownership.
C) the amount of future returns can be reasonably estimated.
D) the amount of goods returned is likely to be high.