10 & 11

Question 10 (8.333 points) Assume KnightStrike, Inc. sells a jousting lance costing the company $250 to a customer for $400 on account. KnightStrike offers a right of return and expects returns to amount to 3% of sales. Due to this sale, the contra-revenue account of allowance for sales returns will... A) reduce revenues by $12.00. B) increase revenues by $12.00. C) reduce revenues by $7.50. D) increase revenues by $7.50. Question 11 (8.333 points) As in question 10, assume KnightStrike, Inc. sells a jousting lance costing the company $250 to a customer for $400 on account. KnightStrike offers a return and expects returns to amount to 3% of sales. Due to this sale, the COGS will be... right of A) reduced by $7.50. B) increased by $12.00. C) reduced by $12.00. D) increased by $7.50