Ignoring estimated future returns and allowances has a trivial effect on income when the amount of actual returns and allowances does not vary greatly from year to year.

Question

Quizplus · Accepted Answer

Ignoring estimated future returns and allowances will have a trivial effect on income only when the actual returns and allowances do not vary significantly from year to year. This is because if the actual returns and allowances vary significantly, ignoring the estimated future returns and allowances can result in misleading financial statements and incorrect income calculations.

Ignoring Estimated Future Returns and Allowances Has a Trivial Effect