If the amount of sales returns and allowances is large in proportion to gross sales, a weakness in the merchandising operations is indicated and the trouble should be determined and corrected.

Question

Quizplus · Accepted Answer

A high proportion of sales returns and allowances indicates that there may be issues with the quality of merchandise, customer service, pricing, or other aspects of the merchandising operations. It is important to identify and address these issues to reduce the amount of returns and improve overall performance.

If the Amount of Sales Returns and Allowances Is Large