Mary operates a wholesale business that distributes high quality doll houses. One day, her best customer called to say they hadover-ordered and would like to return $500 worth of product that was billed on account. To maintain good relations with thiscustomer, Mary graciously accepted the return. The cost of the product is $300. Which of the following entries correctly recordsthe sales return? Assume Mary uses the perpetual inventory system.Select one:a. Debit Sales Returns and Allowances $500, Credit Accounts Receivable $500b. Debit Sales Returns and Aliowances $500, Credit Accounts Recervable $500 and Debit Merchandise Inventory $300,Credit Cost of Goods Sold $300c. Debit Sales Revenue $500, Credit Merchandise Inventory $300, Credit Cost of Goods Sold $200d. Credit Sales Revenue $500, Debit Accounts Receivable $500 and Credit Merchandise Inventory $300, Debit Cost ofGoods Sold $300

Answer.Mary received a canned food already sold to a customer worth $500 and the cost of those goods…

Mary operates a wholesale business that distributes high quality doll houses. One day, her best customer called to say they had over-ordered and would like to return $500 worth of product that was billed on account. To maintain good relations with this customer, Mary graciously accepted the return. The cost of the product is $300. Which of the following entries correctly records the sales return? Assume Mary uses the perpetual inventory system.

Mary operates a wholesale business that distributes high quality doll houses. One day, her best customer called to say they had over-ordered and would like to return $500 worth of product that was billed on account. To maintain good relations with this customer, Mary graciously accepted the return. The cost of the product is $300. Which of the following entries correctly records the sales return? Assume Mary uses the perpetual inventory system.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter14: Adjustments For A Merchandising Business

Section: Chapter Questions

Problem 1MYW: A friend of yours recently opened Abracadabra, a sportswear shop specializing in monogrammed...

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Mary operates a wholesale business that distributes canned food. She receives a complaint from a customer and accepts $500 worth of product back from the customer that was billed on account. The cost of the product is $300. Which of the following entries is correct? Select one: a. Dr. Sales Returns and Allowances $500, Cr. A/R $500 and Dr. Merchandise Inventory $300, Cr. COGS $300 b. Dr. A/R $500, Cr. Sales Returns and Allowances $500 c. Dr. A/R $500, Cr. Sales Returns and Allowances $500 and Dr. Merchandise Inventory $300, Cr. COGS $300 d. Dr. Sales Returns and Allowances $500, Cr. A/R $500
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