Final answer:
The journal entry to record the refund from the cost of the sale would be option d. Debit Inventory, $900.
Step-by-step explanation:
The journal entry to record the refund from the cost of the sale would be option d. Debit Inventory, $900.
When Global Company refunded Montana Industries $900 for returned merchandise, it will need to decrease the Inventory account because the merchandise is no longer part of the company's inventory. Debiting the Inventory account will decrease it by the amount of the refund, which is $900.
Therefore, the correct journal entry will be:
- Debit Inventory $900
- Credit Accounts Payable $900