Acc100 Financial Accounting: Week 5 DQ 1 - Merchandise

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Sales returns refers to merchandise that customers return back after a sale is completed due to a variety of reasons including defective merchandise, incorrect item, poor quality, wrong specifications, etc. Most companies allow customers to return merchandise for a full refund. Sales allowance on the other hand refers to reductions in the selling price of merchandise sold to customers and can happen in cases of damaged merchandise. Damaged merchandise can make customers very unhappy and in order to avoid future lost sales and customers, most companies offer an allowance (reduction in price) to the customer to keep the item.

Acc100 Financial Accounting
Week 5 DQ 1
Discussion: Merchandise
• Assume that you are an inventory manager and you notice that a lot of merchandise is being returned. Discuss what might be the possible causes and any action that you might take.
• Although you have a hunch of what might be the cause, explain at least two steps you would take to verify your hunch.
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