In a Cost of Quality (COQ) Report, Sales Returns and Allowances

question 9

Multiple Choice

In a Cost of Quality (COQ) report, sales returns and allowances due to quality deficiency would be classified as:

• A) Prevention costs.
• B) Salvage costs.
• C) Appraisal costs.
• D) Internal failure costs.
• E) External failure costs.

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Definitions:

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of assets, provision of services, or other means.

Debits

Accounting entries that result in an increase in assets or expenses and a decrease in liabilities, equity, or income.

Credits

In accounting, credits are entries that decrease assets or increase liabilities and equity on a company's balance sheet.

Double-entry Bookkeeping System

A method of bookkeeping where every entry to an account requires a corresponding and opposite entry to a different account, ensuring the accounting equation is always in balance.