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Question: 1 / 135

What is the impact on inventory when a customer return is received?

The item is marked as an expense

The item is removed from inventory

The returned item is added to available inventory

When a customer return is received, the correct impact on inventory is that the returned item is added to available inventory. This is because the return essentially reverses the initial sale, allowing the item to be available for resale or for use in fulfilling future orders.

When customers return products, the inventory management system will recognize that the item is no longer sold and should be counted back into the available stock. This ensures that the company's inventory levels accurately reflect the current stock on hand and that there is precise visibility over available products. Such management of inventory is crucial for maintaining customer satisfaction and preventing stockouts.

In contrast, marking the item as an expense does not accurately reflect the transaction since the return reinstates the item to the company’s inventory rather than discarding its value. Removing the item from inventory would incorrectly suggest that the item is no longer available for resale. Sending the item to a special location may apply to certain types of returns but is not a standard practice for all returns and does not reflect an adjustment to available inventory in a general context. Therefore, adding the item back into available inventory accurately captures the essence of handling returns effectively.

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The item is sent to a special location

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