An Adjusting Entry Needed To Estimate Future Customer Behavior Includes What? (MCQ)

Answer And Explanation Of MCQ With Journal Entry

An Adjusting Entry recorded to estimate future customer behavior includes Customer Returns Or Sales Returns, as the customer returns show how much the customer is satisfied with the goods or services sold to them by the corporation.

The adjusting entry to record is shown below:

                                                       Sales Returns a/c  XXX

 

                                                                                         Accounts Receivable a/c  XXX

 

                                                                    (Merchandise Returned By Customer )

We debit sales returns account as now the customers don't want to purchase those goods which they previously purchased from the company. Also we credit accounts receivable account as the customers will not be liable to pay to company for goods sold to them by the company.