When do most companies record sales returns and allowances?
A) during the month in which the sale occurs
B) during the accounting period in which the return occurs
C) whenever the customer contacts the company regarding the credit
D) during the month after the sale occurs

Question

Quizplus · Accepted Answer

Sales returns and allowances are recorded during the accounting period in which the return occurs, as per the matching principle of accounting. This ensures that revenue and expenses are recorded in the same accounting period to accurately reflect the financial results of the business.

When Do Most Companies Record Sales Returns and Allowances