If Returned Merchandise Is Not Damaged and Can Be Sold

question 23

Multiple Choice

If returned merchandise is not damaged and can be sold again, the seller must record two journal entries. What will the seller record as the second journal entry?

• A) Sales Returns and Allowances Accounts Receivable
• B) Accounts Receivable Sales
• C) Inventory Cost of Goods Sold
• D) Inventory Accounts Receivable

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Definitions:

Market Portfolio

A theoretical portfolio that includes all assets in the market, with each asset weighted according to its market capitalization.

Risk Aversion

This concept describes an investor's preference to minimize uncertainty or to avoid risk in their investment decisions.

Risk-Free Rate

An anticipated gain from an investment devoid of financial risk, frequently illustrated through the returns on state bonds.

Arbitrage

The simultaneous purchase and sale of an asset in different markets to exploit price differences for a risk-free profit.