Question

Sue’s Jewelry sold 30 necklaces for $25 each to a credit customer. The invoice included a 6% sales tax and payment terms of 2/10, n/30. Five necklaces were returned prior to payment. The entry to record the return would include a

A. debit to Sales Returns and Allowances for $132.50.
B. debit to Sales Returns and Allowances for $125.00.
C. credit to Sales Tax Payable for $7.50.
D. debit to Accounts Receivable for $132.50.

Answer 1

The right answer for the question that is being asked and shown above is that: "B. debit to Sales Returns and Allowances for $125.00. " Five necklaceswere returned prior to payment. The entry to record the return would include a B. debit to Sales Returns and Allowances for $125.00.