Problem: By treating sales returns and allowances, sales discounts, and credit card discounts as contra- revenues, we have the following impact a. Gross profit is reduced by sales returns and allowances, sales discounts and credit card discounts b. Gross profit is increased by sales returns and allowances, sales discounts and credit card discounts c. Gross profit is unchanged by sales returns and allowances, sales discounts and credit card discounts d. Net income is increased by sales returns and allowances, sales discounts and credit card discounts

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Problem Details

By treating sales returns and allowances, sales discounts, and credit card discounts as contra- revenues, we have the following impact

a. Gross profit is reduced by sales returns and allowances, sales discounts and credit card discounts

b. Gross profit is increased by sales returns and allowances, sales discounts and credit card discounts

c. Gross profit is unchanged by sales returns and allowances, sales discounts and credit card discounts

d. Net income is increased by sales returns and allowances, sales discounts and credit card discounts

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