Asked by Michelle Warren on May 29, 2024
Verified
Sales Returns & Allowances is recorded on the:
A) Balance Sheet.
B) Statement of owner's equity.
C) Income Statement.
D) None of these is correct.
Sales Returns & Allowances
Transactions where sellers accept returned goods from buyers, or provide a price reduction or discount, reducing the initial sales revenue.
Income Statement
A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income or loss.
- Grasp the concept of recording the payment for purchases and the impact of merchandise returns on financial statements.
Verified Answer
ZK
Zybrea KnightJun 04, 2024
Final Answer :
C
Explanation :
Sales Returns & Allowances is recorded on the Income Statement as it directly affects a company's revenue.
Learning Objectives
- Grasp the concept of recording the payment for purchases and the impact of merchandise returns on financial statements.