Which of the Following Statements Is Not True About Sales

question 78

Multiple Choice

Which of the following statements is not true about sales returns & allowances?

• A)Sales returns and allowances can provide useful information about the quality of merchandise and the possibility of unsatisfied customers.
• B)Sales returns and allowances are recorded in a separate contra-revenue account.
• C)Sales returns and allowances are always disclosed in external financial statements.
• D)Sales returns and allowance are closed to retained earnings at the end of the year.

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Definitions:

Partially Executed

Refers to a contract or agreement where some, but not all, of the required actions have been completed by the parties involved.

Illegal Contract

An agreement between parties that is prohibited by law or violates legal statutes, making it unenforceable.

Breach

To violate a law, by an act or an omission, or to break a legal obligation that one owes to another person or to society.

Illegal Contract

An agreement that is either unlawful in nature or made with the purpose of undertaking an illegal act, and thus, is not enforceable by law.