The Entry to Record the Return of Merchandise from a Customer

question 206

Multiple Choice

The entry to record the return of merchandise from a customer would include a

• A) debit to Sales
• B) credit to Sales
• C) debit to Customer Refunds Payable
• D) debit to Estimated Returns Inventory

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Definitions:

Operating Cash Flow

The amount of cash generated by a company's normal business operations, indicating its ability to cover bills and expenses.

Variable Costs

Variable costs are expenses that change in proportion to the activity of a business.

Financial Break-Even

The point at which total revenues are equal to total fixed and variable costs, resulting in a net income of zero.

Soft Rationing

Internal limitations set by a company on the amount of funds allocated for new investments or projects.