A customer returned merchandise purchased with cash with a sales price of $4,500.The cost of goods was $1,800.Which of the following represents the correct way to record this transaction?

Question

Quizplus · Accepted Answer

The correct way to record this transaction is to debit the Sales Returns and Allowances account for $4,500 and credit Cash for $4,500 to record the return of merchandise for cash. To account for the return of cost of goods sold, the Inventory account needs to be debited for $1,800 and the Cost of Goods Sold account needs to be credited for $1,800. Choice B reflects this transaction correctly.

A Customer Returned Merchandise Purchased with Cash with a Sales