Which of the following statements is true regarding return authorizations?

Return authorizations are an essential part of the returns process in many business environments, and the statement that they must be approved prior to issuing credits captures a fundamental operational requirement. This process ensures that returns are legitimate, properly documented, and managed in a way that protects the financial integrity of the organization.

By requiring approval for return authorizations, companies can prevent potential abuse of the return policy and maintain control over inventory levels. It serves as a safeguard against unauthorized returns that could result in financial losses or inventory inaccuracies. Furthermore, this approval process allows organizations to track return patterns and metrics which can inform improvements in products or customer service.

The assertion outlined in option B aligns with standard practices seen in many accounting and inventory management systems, where strict controls around returns are emphasized to ensure accurate financial data and inventory records. This process also allows customer service teams to handle returns efficiently and maintain a good relationship with customers by addressing issues in a structured manner.