Hugh Snow returned merchandise to Farley Co. The entry on the books of Farley company to record the return of merchandise from Hugh Snow would include a:

Question

Quizplus · Accepted Answer

The entry to record the return of merchandise from Hugh Snow should include a debit to Sales Returns and Allowances account because this account is used to record the reduction in sales revenue due to merchandise returns or allowances granted to customers. None of the other options would be appropriate in this scenario since Farley Co. is not returning money owed to Hugh Snow (so Accounts Payable and Accounts Receivable are not involved), and the return of merchandise does not affect the amount of sales revenue earned (so Sales should not be debited).

Hugh Snow Returned Merchandise to Farley Co