All of the Following Statements Regarding Sales Returns and Allowances

question 166

Multiple Choice

All of the following statements regarding sales returns and allowances are true except:

• A)New revenue recognition rules require sellers to report sales net of expected returns and allowances for annual periods.
• B)The Inventory Returns Estimated account is a current liability account.
• C)Sales returns and allowances estimates are typically made as period-end adjustments.
• D)When sales returns and allowances adjustments are made to sales,an estimate must also be made for the cost side.
• E)Sales Refund Payable is a current liability account.

---

Definitions:

Brand-Name Hotel

A hotel that is part of a famous or widely recognized chain, often distinguished by a well-known trademark or brand identity.

Concentration Ratio

An indicator that measures the total market share of the top firms in an industry, used to assess the level of market concentration.

Competitive

Describes a market situation where multiple sellers are vying for the same customer base, promoting innovation and price reduction.

Excise Tax

A tax imposed on specific goods and services, such as tobacco, gasoline, and alcohol, often used to discourage their use and generate revenue.