The Return of Merchandise by a Credit Customer Was Recorded

question 69

Multiple Choice

The return of merchandise by a credit customer was recorded with a debit to Accounts Payable and a credit to Accounts Receivable and the subsidiary ledger. This error will cause:

• A) the net income for the period to be overstated.
• B) the net Sales for the period to be overstated
• C) the control account to not agree with the subsidiary ledger.
• D) the assets to be overstated.

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Definitions:

Total Surplus

Total surplus is the sum of consumer surplus and producer surplus in a market, representing the overall economic benefit to society from market transactions.

Imposed

Refers to actions or conditions that are applied or enforced by authority or necessity without the recipient's active consent.

Total Surplus

The sum of consumer and producer surplus, representing the total benefit to society from the production and consumption of goods or services.

Equilibrium

A state in which market supply and demand balance each other, and as a result, prices become stable.