General Studies · Revenue Recognition (IFRS 15)
On 1 April 20X7, Chimpy Co. delivered a machine to a new customer priced at $260,000. The customer had a right to return the machine for a full refund at any time up to and including 30 June 20X7. At 1 April 20X7, Chimpy Co. was unsure whether they were likely to return the machine. Which of the following is the correct accounting treatment on 1 April 20X7?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1No accounting entry is recognised
- 2Dr Receivable $260,000; Cr Refund liability $260,000✓
- 3Dr Refund liability $260,000; Cr Revenue $260,000
- 4Dr Receivable $260,000; Cr Revenue $260,000
Correct answer
Dr Receivable $260,000; Cr Refund liability $260,000
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