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A wholesaler that you have as a client sells its products with a right of return for three months from the date of the sale.

A wholesaler that you have as a client sells its products with a right of return for three months from the date of the sale. It is now the end of the year and your client wants to reduce revenue with a contra-account for estimated returns to be received in the next period. Is this the correct accounting treatment? Provide a reference from the FASB ASC to support your response.

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