A debit to Sales Returns and Allowances and a credit to Accounts Receivable mean that a customer may have returned merchandise.

Name: A debit to Sales Returns and Allowances and a credit to Accounts Receivable mean that a customer may have returned merchandise.
Brand: Quizplus
Rating: 4.8 (48 reviews)

Question

Quizplus · Accepted Answer

This is correct accounting treatment for merchandise returns by a customer. The debit to Sales Returns and Allowances reduces the revenue from the original sale, while the credit to Accounts Receivable reduces the amount that the customer owes.

A Debit to Sales Returns and Allowances and a Credit