If Merchandise from a Cash Sale Is Returned by a Customer

question 18

Multiple Choice

If merchandise from a cash sale is returned by a customer for a refund the sales return is recorded in the

• A) general journal.
• B) cash receipts journal.
• C) cash payments journal.
• D) sales journal.

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Definitions:

Cost-Volume-Profit Relationships

An analysis tool measuring how changes in costs, sales volume, and price affect a company’s profit.

Net Operating Income

The profit realized from a business's operations after subtracting operating expenses from gross profit.

Sold Unit

Refers to a single unit of product that has been sold, representing a measure of the volume of sales transactions.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, influenced by the proportion of fixed costs to variable costs.