Under the perpetual inventory system,the adjusting journal entries to record estimated sales returns (the original sales were on account)would be:

Question

Quizplus · Accepted Answer

Under the perpetual inventory system, the estimated sales returns are recorded in a separate account called "Sales Returns and Allowances." Therefore, the adjusting journal entry would be to credit the Sales Returns and Allowances account and debit the Accounts Receivable account for the estimated amount of returns. Option B shows the appropriate accounts being debited and credited.

Under the Perpetual Inventory System,the Adjusting Journal Entries to Record