A Company Records a Sales Return from a Credit Customer

question 70

Multiple Choice

A company records a sales return from a credit customer.Indicate how this transaction would affect the following five financial statement items.
$\begin{array}{llllll}&&& \text { Stockholders' } \\&\text { Assets } &\text { Liabilities } &\underline{\text { Equity }}& \underline{\text { Revenues }} &\underline{\text { Expenses }}\\\text { a. } & \text { Decrease } & \text { No effect } & \text { Decrease } & \text { Decrease } & \text { No effect } \\\text { b. } & \text { Increase } & \text { No effect } & \text { Increase } & \text { Increase } & \text { Decrease } \\\text { c. } & \text { Increase } & \text { Increase } & \text { Increase } & \text { Increase } & \text { No effect } \\\text { d. } & \text { No effect } & \text { No effect } & \text { No effect } & \text { No effect } & \text { No effect }\end{array}$

• A)Option a
• B)Option b
• C)Option c
• D)Option d

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Definitions:

Universal Appeal

The quality of being understood and appreciated by people from different cultures and backgrounds.

Crowded Market

A market characterized by a high level of competition, with many businesses offering similar products or services.

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A strategic decision regarding whether to produce goods internally or purchase them from an external supplier.

Decision Tree

A graphical tool used in decision making to visually represent different choices and their possible outcomes, including chance event outcomes, costs, and utilities.