Recording Sales Returns and Allowances in a Separate Account Is

question 62

True/False

Recording sales returns and allowances in a separate account is an important internal control that allows management to evaluate the volume of returns and allowances as a potential indicator of the quality of their products.

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Definitions:

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those shown on a bank statement to ensure consistency.

Days' Sales Uncollected

Days' sales uncollected is a financial metric that estimates the average number of days it takes for a company to collect payments from its credit sales, reflecting on the efficiency of its credit and collection policies.

Receivables

Amounts owed to a company by its customers for goods or services provided on credit.