What is the impact of treating estimated sales returns as a deduction from gross sales but treating sales discounts and credit card discounts as selling expenses?

Multiple Choice

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

Gross profit is reduced by estimated sales returns but earnings from operations is only reduced by sales discounts and credit card discounts.

Gross profit is reduced by sales discounts and credit card discounts but all three accounts cause a decrease in earnings from operations.

Gross profit is reduced by estimated sales returns but all three accounts cause a decrease in earnings from operations.