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:

Dilute Acid

An acid solution that has a low concentration of hydrogen ions compared to its amount of solvent, typically water.

Protonation

The addition of a proton (H+) to an atom, molecule, or ion, usually resulting in a positively charged species.

Equivalents

A measure in chemistry indicating the amount of a substance that reacts with a defined amount of another in a chemical reaction.

Organic Product

A compound resulting from the chemical reactions of organic substances.