Internal controls for handling sales returns and allowances do not include
A)computing bad debt expense using the percentage of credit sales
B)verifying that the goods have been returned
C)authorizing the credit memo by management
D)using the original sales invoice to prepare the sales returns slip

Question

Quizplus · Accepted Answer

Computing bad debt expense using the percentage of credit sales is not directly related to handling sales returns and allowances. It is a separate internal control related to managing accounts receivable and estimating bad debts. The other options are all relevant internal controls for handling sales returns and allowances.

Internal Controls for Handling Sales Returns and Allowances Do Not