To determine how much merchandise was returned from a company's customers, the company should review the
A) Inventory Account.
B) Cost of Goods Sold Account.
C) Sales Returns and Allowances Account.
D) Sales Discounts Account.

Question

Quizplus · Accepted Answer

The Sales Returns and Allowances Account is used to record returns of merchandise by customers. This account indicates the amount of merchandise that has been returned to the company by its customers. Option A is incorrect because the Inventory Account tracks the amount of merchandise on hand and does not track returns. Option B is incorrect because the Cost of Goods Sold Account tracks the cost of merchandise that has been sold and does not track returns. Option D is incorrect because the Sales Discounts Account is used to record discounts given to customers for early payment and does not track returns.

To Determine How Much Merchandise Was Returned from a Company's