Theoretically, the Amount of Estimated Future Returns and Allowances on Credit

question 33

Multiple Choice

Theoretically, the amount of estimated future returns and allowances on credit sales should be recorded during the period of the sale so as not to overstate sales and ending accounts receivable. In practice, these estimates are not recorded by most companies because

• A) the amount of such returns and allowances tends to fluctuate too greatly from period to period.
• B) there is too much uncertainty surrounding such estimates.
• C) such estimates are not allowed according to generally accepted accounting principles.
• D) the amount of such returns and allowances is usually not material.

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Definitions:

Drug Withdrawal

Symptoms that occur after cessation or reduction in intake of addictive substances to which one has become physically or psychologically dependent.

Drug Tolerance

A physiological state where increased doses of a drug are required to achieve the same effect, due to repeated use over time.

Psychoactive Drug

A chemical substance that alters perceptions and moods.

Visual Hallucinations

Perceptions of seeing something that is not present or that other people cannot see, often associated with medical conditions or substance use.