Sales returns: Gross Profit, Refund Liability, Inventory Estimated Returns

To understand sales returns and the unique accounts that are used for them (Refund liability and Inventory estimated returns), let’s start by reviewing the journal entry for the sale of goods. It raises gross profit (in green) by taking this form: A/R (or cash) $Retail Sales revenue $Retail COGS $Cost Inventory $Cost Now let’s look […]

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