Urban Camping sold goods for $200 to a charge customer.The customer returned for credit $80 worth of goods.Which entry is required to record the return transaction?

Question

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The return of goods by the customer results in a reduction in revenue earned and accounts receivable. Therefore, we need to debit Sales Returns and Allowances (contra revenue account) and credit Accounts Receivable (asset account) to record the return transaction. Option B is incorrect because we do not credit Sales account for a return. Option C is incorrect because it reverses the debit and credit accounts of the transaction. Option D is incorrect because it debits Accounts Receivable instead of Sales Returns and Allowances.

Urban Camping Sold Goods for $200 to a Charge Customer