If a customer purchases goods for $560 on account and later is issued a credit memorandum to receive credit for the return of $160 of goods, the balance due is

Question

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The customer purchased goods for $560 on account, so the initial balance due is $560. However, they returned $160 worth of goods and were issued a credit memorandum. This means that the amount of the credit memorandum ($160) needs to be subtracted from the initial balance due ($560) to get the new balance due.

$560 - $160 = $400

Therefore, the balance due is $400, which is option B.

If a Customer Purchases Goods for $560 on Account and Later