What is one possible reason why the account Sales Returns and Allowances needs to be established as a contra account?
A) So that managers can keep a running balance of returned goods in order to be able to sell the damaged goods to the employees of the organization as an incentive
B) So that managers can produce more goods when goods get returned in order to hit monthly bonus levels
C) So that managers can make adjustments to the manufacturing process when goods are returned for defective reasons
D) So that factory foremen can manage when invoices are paid
E) So that factory foremen can control the amount of credit they grant customers
Correct Answer:
Verified
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