CustomTee Inc. contracts with various customers to sell T-shirts. In the case of sales, CustomTee’s normal accounting policy requires a written and signed sales agreement. On July 1, in response to a special last-minute phone call from a regular customer, CustomTee delivered 500 T-shirts for $5,000. Does CustomTee have an enforceable contract?
Ascertain whether the Incorporation T has enforceable contract.
Contract:
Contract is an agreement among two parties or more parties which includes enforceable obligations and rights. A contract can be written, oral or implied by ordinary business practices.
Criteria that company must apply to revenue recognition standards to contracts are as follows:
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