Under the Perpetual Inventory System,what Is the Difference Between a Sales

question 89

Multiple Choice

Under the perpetual inventory system,what is the difference between a sales return and a sales allowance?

• A)A sales return reduces the amount receivable from the customer,but an allowance does not.
• B)A sales return involves an adjustment to Merchandise Inventory,but a sales allowance does not.
• C)A sales return requires a debit to Sales Returns and Allowances,but a sales allowance does not.
• D)A sales return is not deducted from sales revenue to calculate net sales,but sales allowance is added to sale revenue.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed by the government.

Net Profit Margin Percentage

A financial metric that shows the percentage of revenue that remains as profit after all expenses have been subtracted from total sales.

Net Operating Income

A measure of a company's profitability from its regular business operations, excluding expenses and revenues from non-operational activities.

Gross Margin

The difference between the sales and the cost of goods sold, which shows the profitability before deducting operational expenses.