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An audit client that manufactures and sells goods to a network of authorized dealers may create the equivalent of a consignment sale if the client: 1
An audit client that manufactures and sells goods to a network of authorized dealers may create the equivalent of a consignment sale if the client:
1. only allows goods to be returned if they are damaged.
2. allows a cash discount if the receivable is paid within 30 days.
3. allows an unconditional right of return at any time until the goods are sold by the dealer.
4. ships goods only on a collect on delivery (C.O.D.) basis.
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