Which of the following is a correct statement?
A)Sales discounts are offered to compensate customers for unsatisfactory merchandise.
B)Sales discounts are offered to encourage prompt payment by customers.
C)Sales discounts may result in creating a liability Deferred Revenue.
D)Sales discounts may result in creating an account Inventory-Estimated Returns.

Question

Quizplus · Accepted Answer

A company offers its customers a discount to promote early collection of its accounts receivable.The Deferred Revenue and Inventory-Estimated Returns accounts are used in accounting for expected returns,not sales discounts.

Which of the Following Is a Correct Statement