Feathertouch Company sold merchandise worth $800 on credit,terms n/15 and the next day the customer returned merchandise worth $50,which cost $30 for Feathertouch company.What is the required journal entry to record the merchandise returns under the perpetual inventory system?
A) Accounts Receivable 50
Sales Returns and Allowances 50
Cost of Goods Sold 30
Merchandise Inventory 30
B) Sales Returns and Allowances 50
Accounts Receivable 50
Merchandise Inventory 30
Cost of Goods Sold 30
C) Accounts Receivable 50
Merchandise Inventory 50
Cost of Goods Sold 30
Sales 30
D) Merchandise Inventory 50
Sales 50
Sales 30
Cost of Goods Sold 30

Question

Quizplus · Accepted Answer

The merchandise returns are recorded as a debit to Sales Returns and Allowances and a credit to Accounts Receivable. The cost of goods returned is also recorded by debiting Merchandise Inventory and crediting Cost of Goods Sold.

Feathertouch Company Sold Merchandise Worth $800 on Credit,terms N/15 and the Next