D."101 OUD ISOLTOUUU 0 101 TO 511LOL LO2 M5-25. Sales Returns Which of the following statements is true relating to the allowance for sales returns? a. Sales returns is treated as an expense in the income statement and, therefore, reduces profit for the period. b.An excess of the amount by which the allowance for sales returns is increased compared with the actual returns for the period indicates the company may have inflated profit for the period. c. The amount by which the allowance for sales returns is reduced during the period is recognized as a reduction of sales for the period, thus reducing profit. d. Increasing the allowance for sales returns by an amount that is less than the actual returns recognized for the period may indicate either the company is attempting to increase profit for the period or it estimates that less of its products will be returned in the future