Question 6
Theo Limited is a household appliances manufacturer that sells its products with a standard guarantee of two years. Sales returns can be reliably measured. The shipping terms are FOB Shipping Point. When should Theo Ltd recognize the revenue from the sale of its appliances.
- Ratably over the two-year period of the guarantee
- When the products are loaded on board
- At the date the goods arrive at the buyer’s destination
- At the end of the two-year guarantee period
- None of the above