All of the Following Statements Regarding Sales Returns and Allowances

question 100

Multiple Choice

All of the following statements regarding sales returns and allowances are true except:

• A)Sales returns and allowances can include a reduction is the selling price because of damaged merchandise.
• B)Sales returns and allowances do not reflect the possibility of lost future sales.
• C)Sales returns and allowances are recorded in a separate contra-revenue account.
• D)Sales returns and allowances are rarely disclosed in published financial statements.
• E)Sales returns and allowances are closed to the Income Summary account.

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Definitions:

Revenue Formulas

Equations or calculations used to determine the amount of money a company generates from its business activities, typically through sales.

Patient-visits

A term used in healthcare to describe the instances in which a patient visits a healthcare provider or facility for services or consultation.

Planning Budget

A financial plan that estimates the income and expenditures for a future period, often used as a guide for financial decision making.

Revenue

The income generated from normal business operations and includes discounts and deductions for returned merchandise.