On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Vander uses the periodic inventory system.On September 14,Jepson returns some of the merchandise.The selling price of the returned merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Vander must make on September 14 is:

Question

Quizplus · Accepted Answer

Vander Company needs to record the return of merchandise by Jepson Company. This would reduce the accounts receivable balance and also reduce the sales revenue and cost of goods sold by the amounts returned. The entry to be made is:
Accounts Receivable - Jepson             $500
Sales Returns and Allowances             $500
Cost of Goods Sold                             $350
Inventory                                            $350
Thus, option B is the correct answer.

On September 12,Vander Company Sold Merchandise in the Amount of $5,800