Question

Generally accepted accounting principles require that revenue be reported net of sales returns and allowances:

A) if practical.
B) if required by industry practice.
C) if the amounts are material.
D) any of the above.

Answer 1

Revenue should be reported net of sales returns and allowances if the amounts are material.

Step-by-step explanation:

The generally accepted accounting principles require that revenue be reported net of sales returns and allowances if the amounts are material. This means that if the sales returns and allowances are significant enough to affect the financial statements, they should be deducted from the total revenue. This is to provide a more accurate representation of the company's revenue.