Which of the following does not relate to either of the two adjusting entries for customer refunds, allowances, and returns? a. One entry creates an estimated returns inventory account. b. One entry records the sales of goods to customers. c. One entry creates a customer refund liability account. d. One entry reduces the sales account.

Question

Hope Dixon

Social Studies

18 November, 08:27

Which of the following does not relate to either of the two adjusting entries for customer refunds, allowances, and returns? a. One entry creates an estimated returns inventory account. b. One entry records the sales of goods to customers. c. One entry creates a customer refund liability account. d. One entry reduces the sales account.

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Answers (1)

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Dalia Rosales · Answer 1

a. One entry creates an estimated returns inventory account.

b. One entry records the sales of goods to customers.

Explanation:

If a customer purchased a product on credit and returns that product for a refund, the business would have to make specific adjustments to its financial statements. The company would first make a debit entry to sales returns and allowances that equals the exact amount of the purchase