A company's estimate of merchandise that will be returned by customers should be: A) Included in inventory at an amount equal to the selling price of the merchandise. B) Included in inventory at an amount equal to the cost of the merchandise. C) Excluded from inventory but deducted from sales revenue and accounts receivable. D) None of these answer choices are correct.

B) Included in inventory at an amount equal to the cost of the merchandise.

Explanation:

The cost of merchandise sold can be regarded as cost of products that has been sold out by a wholesaler/ retailer, they Don't manufacture their goods on their own but buy and sell. In estimating inventory , the cost at the start of inventory is added to cost of all purchase at that period. It should be noted that the company's estimate of merchandise that will be returned by customers should be Included in inventory at an amount equal to the cost of the merchandise.

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