a. Identify a business risk that arises as a result of the stock offer on a sale or return basis between Resilient and its retail distributors.
As the home ware and antique furniture stores are invoiced immediately, which retailers are given stock on credit for 90 days to pay and even with an option to return within 30 days before the payment due, there is a risk that the retail distributors are going to import a huge number of grandfather clocks at once to reduce shipping cost, regardless of whether they can sell it or not and then return them to Resilient within 30 days before payment is due if they cannot sell it.
Explain the risk of material misstatement of two asset accounts that arises from the business risk identified above.
