Under what circumstances should a company with high rate of return on sales consider the inventory sold?
A) When it can reasonably estimate the amount of returns
B) When the retailer gives a confirmation that the goods won't be returned
C) When the goods are sold on installment
D) When the payment for goods is received

Question

Quizplus · Accepted Answer

A company with a high rate of return on sales should consider the inventory sold when it can reasonably estimate the amount of returns. This is important to accurately track the true profitability of the company and to make informed business decisions. The other options, such as receiving payment for goods or receiving confirmation from a retailer, may indicate the sale has been completed but do not take into account any potential returns.

Under What Circumstances Should a Company with High Rate of Return