If Ending Variance Account Balances Are Immaterial, They Can Be

question 36

True/False

If ending variance account balances are immaterial, they can be closed directly to Cost of Goods Sold.

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Definitions:

Purchases Returns

Transactions where a buyer returns goods previously purchased to the seller, often due to defects or other issues, resulting in a credit to the buyer's account.

Sales Returns

Goods returned by the customer to the seller for a refund or credit, typically due to defects or other dissatisfaction.

Depreciation Expense-Equipment

The allocation of the cost of equipment over its useful life, reflecting wear and tear and loss of value over time.

Equipment

Tangible property used in the operation of a business that is not intended for sale in the usual course of business.