Asked by Ashley Bull Calf on Jun 03, 2024
Verified
Ignoring estimated future returns and allowances has a trivial effect on income when the amount of actual returns and allowances does not vary greatly from year to year.
Estimated Future Returns
Projections or forecasts of the financial returns a company expects to receive from investments, assets, or business activities in the future.
- Recognize the effects of future returns and allowances on financial statements.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
True
Explanation :
Ignoring estimated future returns and allowances will have a trivial effect on income only when the actual returns and allowances do not vary significantly from year to year. This is because if the actual returns and allowances vary significantly, ignoring the estimated future returns and allowances can result in misleading financial statements and incorrect income calculations.
Learning Objectives
- Recognize the effects of future returns and allowances on financial statements.
Related questions
In Practice,no End-Of-Period Accrual Is Typically Made for Future Returns ...
A Contra-Revenue Account with a Debit Balance for Returned Goods ...
The Normal Balance of the Sales Returns and Allowances Account ...
If a Customer Agrees to Retain Merchandise That Is Defective ...
Sales Returns and Allowances Is Increased When ...