When a retailing business is making estimates for the expected customer refunds and allowances, it decreases the customer refunds payable account:

Question

When a retailing business is making estimates​ for the expected customer refunds and allowances, it decreases the customer refunds payable account:

Quizplus · Accepted Answer

When making estimates for the expected customer refunds and allowances, the retailing business decreases the customer refunds payable account as it reflects the amount owed to customers for returns or allowances. However, it would not decrease the purchases account or accounts receivable account as they are not directly related to customer refunds and allowances. It would also not decrease operating expenses as they are not affected by refunds and allowances. It might decrease the sales account if the refunds or allowances are significant enough to impact revenue.

When a Retailing Business Is Making Estimates​ for the Expected

When a Retailing Business Is Making Estimates for the Expected