All of the following statements regarding sales returns and allowances are true except:
A. New revenue recognition rules require sellers to report sales net of expected returns and allowances for annual periods.
B. Sales returns and allowances estimates are typically made as period-end adjustments.
C. When sales returns and allowances adjustments are made to sales, an estimate must also be made for the cost side.
D. Sales Refund Payable is a current liability account.
E. The Inventory Returns Estimated account is a current liability account.
Answer: E
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