Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 24 - No. 19)
What accounting impact results from a customer returning faulty goods?
Increase in sales revenue, increase in cash.
Decrease in sales revenue, decrease in accounts receivable.
Decrease in cash, decrease in sales revenue.
Decrease in cost of goods sold, increase in inventory.
Explanation
The company needs to reduce the sale, therefore reducing their revenue and any outstanding accounts receivable.
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