A Returned Asset Should Be Recorded

question 99

Multiple Choice

A returned asset should be recorded

• A) as a direct reduction to inventory.
• B) in a separate account from inventory.
• C) at the same value it was sold for, without considering impairment.
• D) Silly question, returned assets aren't recorded.

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Definitions:

Journalized

The process of recording financial transactions in a company's journal, which is the first step in the accounting cycle.

Adjusting Entries

Ledger adjustments made at an accounting period's end to distribute income and spending according to the period they occurred.

GAAP

A body of accounting and financial reporting standards and rules widely adopted, defined as Generally Accepted Accounting Principles.

Revenue Recognition

The accounting principle that revenue should be reported at the time goods are sold or services are rendered, regardless of when the payment is received.