What is the financial impact on a company when a customer returns a product for a refund?a. Sales revenue will decrease because sales revenue will be debited.b. Sales revenue will not be impacted because the company has already accrued forestimated refunds and returns.c. Sales revenue will increase because sales revenue will be credited.d. Returns expense will increase because returns expense will be debited.
What is the financial impact on a company when a customer returns a product for a refund?a. Sales revenue will decrease because sales revenue will be debited.b. Sales revenue will not be impacted because the company has already accrued forestimated refunds and returns.c. Sales revenue will increase because sales revenue will be credited.d. Returns expense will increase because returns expense will be debited.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter5: Sales And Receivables
Section: Chapter Questions
Problem 5MCQ
Related questions
Question
What is the financial impact on a company when a customer returns a product for a refund?
a. Sales revenue will decrease because sales revenue will be debited.
b. Sales revenue will not be impacted because the company has already accrued for
estimated refunds and returns.
c. Sales revenue will increase because sales revenue will be credited.
d. Returns expense will increase because returns expense will be debited.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College