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Was the accountant method of recording returns acceptable

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Reference no: EM132680256

Problem - Sales returns and allowances

During the year, sales returns and allowances totaled $80,000. The cost of the merchandise returned was $48,000. The accountant recorded all the returns and allowances by debiting the sales account and crediting Cost of Merchandise Sold for $80,000. Was the accountant's method of recording returns acceptable? Explain. In your explanation, include the advantages of using a sales returns and allowances account.

Reference no: EM132680256

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