One of Hawk Company's Customers Returned Products That Cost Hawk

question 121

Multiple Choice

One of Hawk Company's customers returned products that cost Hawk $300, which was sold on account for $450. Which of the following does not correctly describe the effect of the return on the financial statements?

• A)Gross profit decreases $150.
• B)Total current assets decrease $150.
• C)Sales returns and allowances increase $150.
• D)Operating expenses increase $150.

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Definitions:

Conformity

The process of aligning one's attitudes, beliefs, and actions with the norms or standards of a group or society.

Direct Request

A straightforward form of communication where an individual asks for what they need or want clearly and explicitly.

Social Pressure

is the influence exerted by society or a social group on an individual to conform to group norms or behaviors.

Groupthink

A psychological phenomenon that occurs within a group of people, where desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.