A Customer Returned Merchandise That Had Been Paid for Within

question 100

Multiple Choice

A customer returned merchandise that had been paid for within a discount period for credit.The entry was recorded with a debit to Sales Returns and Allowances and a credit to Accounts Receivable for the net amount.This error would cause:

• A)the period end assets to be understated.
• B)the period end liabilities to be understated.
• C)the period's net income to be understated.
• D)None of these are correct.

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Definitions:

Specific Project

A particular and defined piece of work, usually with a set duration, objectives, and resources, meant to achieve a specific goal.

Restricted Contribution

Funds donated with specific conditions attached by the donor, limiting the use of the funds by the recipient.

Statement of Changes

A financial statement delineating how and why specific equity accounts in a company's balance sheet changed over a period.

Net Assets

The total assets of a company minus its total liabilities, representing the owners' equity in the company.