Accounting standards require that material sales returns and allowances be:
A) recorded in the period when the credit memo is issued.
B) recorded as a debit to the sales account.
C) matched with related sales.
D) recorded in the period when the merchandise is returned.

Question

Quizplus · Accepted Answer

Accounting standards emphasize the matching principle, which requires that expenses be matched with the revenues they help to generate. In the case of sales returns and allowances, this means they should be matched with the related sales to accurately reflect the net revenue for the period.

Accounting Standards Require That Material Sales Returns and Allowances Be