Asked by Jessica Slate on Jun 03, 2024

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The Sales Returns and Allowances account does not provide information to management about

A) possible inferior merchandise.
B) the percentage of credit sales versus cash sales.
C) inefficiencies in filling orders.
D) errors in overbilling customers.

Sales Returns

Transactions involving the return of sold goods from the customer to the seller, often resulting in a refund or credit.

Credit Sales

Sales made by a business where payment is delayed as per agreed terms.

Inferior Merchandise

Goods that are of lower quality than the standard expected by consumers, often resulting in reduced customer satisfaction.

  • Understand how sales returns, allowances, and discounts are accounted for and their impact on financial statements.
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JW
Julianna WelkerJun 08, 2024
Final Answer :
B
Explanation :
The Sales Returns and Allowances account only provides information on the amount and type of returns and allowances given to customers, not the percentage of credit sales versus cash sales.