Question

Wexim Toys sold merchandise to a customer on credit, terms 2/10, n/30 for $11,700. Three days later, the customer returned $2,300 of the merchandise. When recording the return transaction, Wexim Toys would record:__________

a) $2,300 in the Accounts Payable Cr. column and $2,300 in the Inventory Dr. column of the purchases journal. b) Debit Sales Returns and Allowances $2,300 and credit Accounts Receivable $2,300 in the general journal. c) $2,300 in the Cash Dr. column and $2,300 in the Inventory Cr. column in the cash receipts journal. d) Debit Cash $2,300 and credit Inventory $2,300 in the general journal. e) $2,300 in the Accounts Payable Dr. column and $2,300 in the Cash Cr. column of the cash payments journal.

Answer 1

b) Debit Sales Returns and Allowances $2,300 and credit Accounts Receivable $2,300 in the general journal.

Step-by-step explanation:

When goods were sold on account, Accounts receivables is debited, and Sales is credited. When goods are returned, Sales Return & Allowances is debited, and Accounts receivables is credited.

Thus, the entry will include Debit in Sales Returns and Allowances $2,300 and Credit in Accounts Receivable $2,300