Assume the periodic inventory system is used.Sammy Company sold inventory on account for $300.A week later,the inventory was returned and a full credit was given to the customer.Which of the following would be Sammy's journal entry to record the return of the inventory?

Question

Quizplus · Accepted Answer

Since the periodic inventory system is used, the revenue (sales) and related accounts such as sales discounts and sales returns and allowances are not affected at the time of sale. When the inventory is returned, the company needs to record the return and the related reduction in accounts receivable. The correct journal entry is to credit accounts receivable for the amount of the return and debit sales returns and allowances for the same amount. Therefore, E) is the correct choice.

Assume the Periodic Inventory System Is Used Cash 300 Accounts Receivable 300\begin{array}{lll}\text { Cash } & 300 \\\quad \text { Accounts Receivable } & &300 \\\end{array} Cash Accounts Receivable ​300​300​

Assume the Periodic Inventory System Is Used $\begin{array}{lll}\text { Cash } & 300 \\\quad \text { Accounts Receivable } & &300 \\\end{array}$