Which of the Following Statements Regarding Sales Returns and Allowances

question 120

Multiple Choice

Which of the following statements regarding sales returns and allowances is true?

• A)Recording sales returns and allowances in a separate account is an important internal control that allows management to evaluate the volume of returns and allowances as a potential indicator of the quality of their products.
• B)The Sales Returns and Allowances account balance should be added to the Sales account balance when computing net sales.
• C)Sales Returns and Allowances account is an example of a contra-asset account.
• D)Recording a sales allowance requires two entries.

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Definitions:

HRIS

Human Resources Information System; a software or online solution for the data entry, data tracking, and data information needs of the human resources, payroll, management, and accounting functions within a business.

Transition Team

A group formed to ensure a smooth changeover in leadership or during the implementation of significant organizational changes.

Conglomerate Merger

The merger of two organizations competing in different markets.

Different Markets

Refers to various types of markets or platforms where goods, services, or securities are exchanged, including but not limited to geographic, demographic, or product-based distinctions.