To determine how much merchandise a company has had returned from its customers, it should review the
A) Cost of Goods Sold account.
B) Inventory account.
C) Sales Returns & Allowances account.
D) Sales Discounts account.

Question

Quizplus · Accepted Answer

The Sales Returns & Allowances account is used to record merchandise returns from customers. This account allows the company to track the amount of sales that have been returned and any allowances or discounts given as a result of the return. The Cost of Goods Sold and Inventory accounts would not provide information specifically related to returns, and the Sales Discounts account is used for recording discounts given to customers for early payment, not returns.

To Determine How Much Merchandise a Company Has Had Returned