The Return of Merchandise Was Recorded as a Debit to Accounts

question 119

Multiple Choice

The return of merchandise was recorded as a debit to Accounts Payable and a credit to Purchases.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:

Public Relations Costs

Expenses related to managing the public image and communications of a company.

Fixed Cost Per Unit

The fixed costs of production (expenses that do not change with the level of output) divided by the number of units produced.

Relevant Range

The range of activity or volume over which the assumptions about variable and fixed costs are valid for budgeting and planning purposes.

Direct Manufacturing Cost

The sum of all direct costs associated with the production of goods, including labor and materials.