A Sales Returns and Allowances Account Is Not Debited If

question 14

Multiple Choice

A Sales Returns and Allowances account is not debited if a customer

• A)returns defective merchandise.
• B)receives a credit for merchandise of inferior quality.
• C)pays within the discount period.
• D)returns goods that are not in accordance with specifications.

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Definitions:

Futures Contract

A standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future, often used as a financial instrument for hedging or speculation.

Option Contract

A contract which gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price within a specified time.

Financial Instruments

Contracts that give rise to both a financial asset of one entity and a financial liability or equity instrument of another entity.

Convertible Note

A financial instrument that can be converted into a specified number of shares of the issuing company at certain times during its life, usually at the discretion of the holder.