Regarding the End of Period Adjusting Entries to Record Estimated

question 80

Multiple Choice

Regarding the end of period adjusting entries to record estimated sales returns,which of the following statements is correct? (Assume the perpetual inventory system is used.)

• A) Companies use data published by the FASB to estimate the amount of sales returns related to the sales of similar companies.
• B) It is acceptable to prepare a single adjusting entry which debits Estimated Returns Inventory and credits Refunds Payable.
• C) Both Sales Revenue and Cost of Goods Sold accounts are decreased.
• D) Estimated Returns Inventory is an income statement account.

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Definitions:

Organizational Goals

Objectives or targets that a business or organization aims to achieve, guiding its strategic planning and actions.

Team Norms

Shared guidelines or rules of conduct within a team that dictate the acceptable behavior of team members.

Reinforcement

In psychology, the process of encouraging or establishing a pattern of behavior by offering rewards or consequences.

Knowledge-based Trust

A form of trust that is founded on the belief in the competence and knowledge of others.