Answered: d. The sales department approves sales…

d. The sales department approves sales credit memos as the result of product returns and forwards these to the AR department, which adjusts the customer accounts to reflect the return.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter14: Adjustments For A Merchandising Business

Section: Chapter Questions

Problem 5TF: Sales Returns and Allowances is classified as a contra-cost account on the income statement.

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Question

Is it properly segragated? If no explain the reason why.

d. The sales department
approves sales credit memos
as the result of product
returns and forwards these to
the AR department, which
adjusts the customer
accounts to reflect the
return.

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