There Are Various Appropriate Accounting Treatments When a Sale Is

question 25

Multiple Choice

There are various appropriate accounting treatments when a sale is made subject to a right of return.These methods include:

• A) recording the sale and accounting for the returns as they occur in future periods.
• B) recording the cash received as held in trust until all return privileges have expired.
• C) recording the sale but reducing sales by an estimate of the future returns.
• D) recording the sale and accounting for the returns as they occur in future periods and recording the sale but reducing sales by an estimate of the future returns.

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Definitions:

Addition

The mathematical process of combining two or more numbers to get their total.

Exponentiation

A mathematical operation involving two numbers, the base and the exponent, where the base is multiplied by itself as many times as the exponent indicates.

Division

A mathematical operation involving the process of calculating how many times one number is contained within another.

Multiplication

A mathematical operation that calculates the total of repeatedly adding a number to itself a specified number of times, symbolized by the sign ×.