A Customer Returns Merchandise That Was Delivered in Poor Condition

question 31

Multiple Choice

A customer returns merchandise that was delivered in poor condition and that does not meet specification. The account that the seller would debit for the amount of the return is

• A) Sales Returns and Allowances.
• B) Purchase Returns and Allowances.
• C) Sales.
• D) Purchases.

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Definitions:

Optimal Point

The most favorable or advantageous condition or value of a variable determined within a given set of constraints.

Marginal Benefits

The added pleasure or value that comes from the additional consumption or production of a good or service unit.

Marginal Costs

The supplementary cost involved in the production of one more unit of a product or service.

Production Possibilities Curve

A graph that shows the maximum number of possible units of two commodities that a economy can produce with available resources and technology.