A Debit to Sales Returns and Allowances and a Credit

question 205

Multiple Choice

A debit to Sales Returns and Allowances and a credit to Accounts Receivable:

• A)Reflects an increase in amount due from a customer.
• B)Recognizes that a customer returned merchandise and/or received an allowance.
• C)Records the cost side of a sales return.
• D)Is recorded when a customer takes a discount.
• E)Reflects a decrease in amount due to a supplier.

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Definitions:

Ratio Analysis

A quantitative analysis of information contained in a company’s financial statements, used to evaluate the overall financial condition and performance of a business.

Forecasting Method

A set of techniques used to predict future events or trends, such as market demand or sales, based on historical data and other information.

Operational Indices

Indicators or metrics used to measure and evaluate the performance and efficiency of an organization's operations.

Nominal Group Technique

A structured method for group brainstorming that encourages contributions from everyone and ranks ideas according to collective agreement.