Question

28.When Customer returns defective goods of a company, which of the following entries should be made? a. Debit Sales, Credit Sales Allowances b. Debit Sale Returns, Debit Inventories c. Debit Inventories, Credit Sales d. Debit Sale Return, Credit

Answer 1

d. Debit Sale Return, Credit

Step-by-step explanation:

When a Customer returns defective goods of a company, the entries that should be made are "Debit Sale Return, Credit."

This is because the usual practice allows that at the install sale, the entries that will be made is Debit, Credit Sale. However, when a return of goods sold is made, the practice allows that the entries will be Debit Sale Return, Credit.