What Is the Impact of Treating Sales Returns and Allowances

question 130

Multiple Choice

What is the impact of treating sales returns and allowances as a contra revenue but treating sales discounts and credit card discounts as selling expenses?

• A)Gross margin is reduced by sales returns and allowances,sales discounts and credit card discounts
• B)Gross margin is reduced by sales returns and allowances but all three accounts cause a decrease in profit from operations
• C)Gross margin is reduced by sales returns and allowance but operating profit is only reduced by sales discounts and credit card discounts
• D)Gross margin is reduced by sales discounts and credit card discounts but all three accounts cause a decrease in profit from operations.

---

Definitions:

Ethical Decisions

Choices based on moral principles and values, often considering the well-being of others and the broader society.

Individual Morals

The personal values and ethics that an individual holds, guiding their behavior and decision-making.

Two-Way Communication

A process of exchange where both parties send and receive information, facilitating dialogue and understanding, often used in effective public relations and conflict resolution.

Corporate Stewardship

The responsibility corporations take on to manage their economic, social, environmental, and governance practices sustainably.