Ask Question
12 June, 21:57

On Jan 5, a customer returned merchandise that had been purchased earlier on credit. The original sale was for $500, and the cost to the seller was $150. Demonstrate the required journal entry to record the return on the books of the seller, assuming the goods can be sold to another customer.

+3
Answers (1)
  1. 12 June, 22:06
    0
    Answer: The journal entry for this returned purchase is as follows;

    Dr. Sales Returns and Allowances $500

    Dr. Merchandise Inventory $150

    Cr. Accounts Receivable $500

    Cr. COGS $150

    Explanation:

    The sales account is the revenue of the good/item purchased. The merchandise inventory is a type of an assets. The journal entry is important to a business so that they can track expenses incurred for the returned item. A new entry will need to be made when a new sale is made.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On Jan 5, a customer returned merchandise that had been purchased earlier on credit. The original sale was for $500, and the cost to the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers