When a deposit on returnable containers is forfeited, the firm holding the deposit will experience: An increase in accounts receivable. An increase in revenue. A decrease in cost of goods sold. An increase in current liabilities.

Question

Hadassah Underwood

Business

4 November, 08:58

When a deposit on returnable containers is forfeited, the firm holding the deposit will experience: An increase in accounts receivable. An increase in revenue. A decrease in cost of goods sold. An increase in current liabilities.

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Answers (1)

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Ernesto Pope · Answer 1

An increase in revenue

Explanation:

When a deposit on the returnable containers is forfeited then an increase in the revenue is made and as the originally the deposit was recorded as a current liability in the anticipation it by refunding the deposits has been earned as a revenue. Thus the container has been sold. The deposits thus had been forgotten are now sold and hence an increase of the sales and values of the product.