Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to other students. Initial PostCredit memos are created when a product is returned. Credit memos reduce A/R (accounts receivable) by crediting the account, and it writes off the invoice. This also records a debit to the Sales Returns and Allowances account. You have noticed that the A/R clerk has created an abnormally high number of credit memos. You also notice the inventory does not reflect the additional inventory resulting from the sales returns.Respond to the following in a minimum of 175 words: What would you do, and how would you document your decision? Reply to at least 2 of your classmates. Be constructive and professional in your responses.STUDENT 1Hello Class,If I were to notice an abnormality in the credit memos I would address the issue to the A/R clerk. I would ask for an explanation as to why there is a high number of credit memos. I also would tell them that I noticed that the inventory does not reflect the additional inventory coming from the sales returns. I would have to document this conversation with a formal investigation. I would pull reports to show the actual sales and allowance accounts to verify the information. I would also ask for another co-worker to witness the conversation. I would hope that the clerk has made a mistake and did not document the accounts appropriately and can be resolved. If the A/R clerk can not come up with a reasonable explanation during the investigation then I would have to escalate the issue to my boss or personnel. I'm not sure what the appropriate consequences would be for the clerks actions. All I can do is try and figure out what is missing and how to account for the losses and prevent them moving forward.STUDENT 2If I had noticed the abnormal amount of credit memos I would do more research into the issue. As it is my responsibility to make sure everything checks out and is in balance. I also have an obligation to do what is best for the company so I would have to run reports for AR/Sales returns, go over any adjustments made to the ledger and investigate. I would look into the credit memo's to find out exactly what item(s) that seems to have a difference in the inventory then once I was able to identify the discrepancy I would bring it to my manager. I want to show management what is exactly is going on and how the company is losing money. It is not my position to take disciplinary action but when there is mistakes I am able to show my co-worker how not to make the same mistake again. If it truly is a mistake then we can fix it and move along if I chose to ignore the situation then I can be held liable too. I would not want to be considered an accomplice in this situation if it were negative. I have to do what is best for the company and after bringing all the facts to management they would need to take action and handle the rest if it is not a mistake. My evidence would speak for itself and most people do not realize that if you do not take action in these situations you can be just as much at fault.