Merchandise that has been sold and is returned to the firm by the customer is called
A) a sales discount.
B) an expense.
C) a sales allowance.
D) cost of goods sold.
E) a sales return.

Question

Quizplus · Accepted Answer

When a customer returns merchandise, it is called a sales return. This is different from a sales allowance, which is a partial refund given to the customer to keep the item but offset any defects or issues. A sales discount is a reduction in the price of the merchandise offered to the customer, such as a percentage off for early payment or bulk purchase. Cost of goods sold is the expense of the products sold by the firm, not merchandise returned.

Merchandise That Has Been Sold and Is Returned to the Firm