Under what circumstances should a company with high rate of return on sales consider the inventory sold? a. When it can reasonably estimate the amount of returnsb. When the retailer gives a confirmation that the goods won't be returnedc. When the goods are sold on installmentd. When the payment for goods is received

Question

Business

Alfred Hammond

31 December, 22:50

Under what circumstances should a company with high rate of return on sales consider the inventory sold? a. When it can reasonably estimate the amount of returnsb. When the retailer gives a confirmation that the goods won't be returnedc. When the goods are sold on installmentd. When the payment for goods is received

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Answers (1)

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Steve Cherry · Answer 1

The correct answer is a. When it can reasonably estimate the amount of returns

Explanation:

The percentage of merchandise returned in a given period can be calculated by simply dividing the number of items returned by the number that has been sold. However, if you want to calculate the return percentage on a dollar basis, you must take into account additional factors, such as the penalties charged to customers for the return of merchandise, as well as the costs associated with re-storing returned items.