A large company has hired your friend. She tells you that her boss has asked customers to sign sales agreements just before year end indicating a sale has been made. The boss told customers that he will give them 30 days (well into the next year) to change their minds. If they do not change their minds they will quickly receive the merchandise. If they do change their minds he promised to cancel their orders, take merchandise back, and cancel the invoices. Your friend has been told by her boss to recognize the sales agreements as revenue this year. Your friend has concerns about recognizing revenue before the merchandise is shipped. She likes the company and wants to keep her job. What do you advise her to do?
A large company has hired your friend. She tells you that her boss has asked customers to sign
sales agreements just before year end indicating a sale has been made.
The boss told customers that he will give them 30 days (well into the next year) to change their
minds. If they do not change their minds they will quickly receive the merchandise. If they do
change their minds he promised to cancel their orders, take merchandise back, and cancel the
invoices.
Your friend has been told by her boss to recognize the sales agreements as revenue this year.
Your friend has concerns about recognizing revenue before the merchandise is shipped. She
likes the company and wants to keep her job.
What do you advise her to do?
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