Wally's Calls is a public company that makes duck calls. On June, 1, Wally's received a purchase order and payment from a customer (Matt Smith) for the purchase of 500 duck calls. the calls will be used as a wedding favor and engraved "Matt and Jennifer, 2015." On June 28, Wally's shipped the completed order to Mr. Smith, and Mr. Smith received the duck calls to his door via UPS on June 30. The company policy allows customers to test the duck calls and return the calls within 90 days for a full refund if they are not to the customer's satisfaction. Historically, Wally's has experienced very low product defect rates and thus few customers exercise this option.
Wally's must now determine whether it can recognize the revenue from the sale of the duck calls or whether it must wait until the 90-day customer acceptance window lapses.
Using existing revenue recognition guidance (not pending consent), evaluate whether Wally's meets the criteria to recognize revenue.
need to find specific FASB Accounting Standards Codification to back up answer