Reference no: EM132680313

Problem 1: Control of an asset normally coincides with

1- transfer of legal title to the buyer.

2- transfer of both possession and legal title to the buyer.

3- the receipt of payment from the buyer.

4- transfer of possession to the buyer.

Problem 2: Under IFRS, where a right to return exists,

1- a refund liability is recognized.

2- sales returns and allowances are recognized as contra accounts to Revenues and Accounts Receivable.

3- this right is disclosed in the financial statements; no accrual necessary.

4- this right does not need to be disclosed or accrued anywhere.