Asked by Cassandra Ramirez on Jun 09, 2024
Verified
If a customer agrees to retain merchandise that is defective because the seller is willing to reduce the selling price this transaction is known as a sales
A) discount.
B) return.
C) contra asset.
D) allowance.
Defective Merchandise
Goods that fail to meet quality standards and are therefore returned, repaired, or sold at a discounted price.
Selling Price
Selling price is the amount of money for which a seller is willing to sell his or her product or service.
Sales Allowance
A reduction in the sale price granted by the seller to the buyer, often due to minor defects or because the buyer has returned part of the order.
- Acquire knowledge on the treatment of sales returns, allowances, and discounts in accounting and their influence on financial statements.
Verified Answer
Learning Objectives
- Acquire knowledge on the treatment of sales returns, allowances, and discounts in accounting and their influence on financial statements.
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