Giving a customer a sales allowance
A)increases the amount of Refund Liability.
B)reduces the amount of cost of goods sold.
C)increases the amount of cost of goods sold.
D)reduces the amount of Refund Liability.

Question

Quizplus · Accepted Answer

A sales allowance is a reduction in the selling price of goods or services but does not involve the physical return of the product. It is typically given after the sale has been made, often due to minor defects or dissatisfaction. This reduction in the selling price decreases the amount of refund liability, as it adjusts the original sales value rather than initiating a return process that would increase the refund liability.

Giving a Customer a Sales Allowance