Final answer:
Revenue should not be recognized at the time of sale if the buyer has a right to return and future returns cannot be estimated. Imperfect information makes price agreement challenging, but sellers can reassure buyers with warranties and credible information to reduce uncertainty.
Step-by-step explanation:
The subject of the student's question pertains to the recognition of revenue in accounting, which is a fundamental concept in business and finance. Revenue is recognized when it is earned and realizable, which is typically at the time of sale. However, there are certain criteria outlined in revenue recognition principles that must be met to recognize revenue. In this context, a sale should not be recognized as revenue at the time of sale if the buyer has a right to return the product and the amount of future returns cannot be reasonably estimated (c. in the question).
When imperfect information exists, it can be difficult for a buyer and seller to agree on a price because each party may have a different understanding and assessment of the value and risk associated with the product or service. A seller can reassure a potential buyer by providing credible information, such as warranties, certifications, or third-party endorsements, to reduce the uncertainty and establish trust.