Botanic Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extend 60 days. On February 10, 2018, a customer purchases $4,000 of products (cost $2,000). Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the expected sales return and cost of goods sold includes a: a. debit to cash and a credit to sales revenue of $4,000 b. debit to sales revenue and allowances of $800 and a credit to cost of goods sold of $400 c. debit to cost of goods sold and credit to inventory of $2,000 d. credit to estimated inventory returns of $400
Botanic Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extend 60 days. On February 10, 2018, a customer purchases $4,000 of products (cost $2,000). Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the expected sales return and cost of goods sold includes a: a. debit to cash and a credit to sales revenue of $4,000 b. debit to sales revenue and allowances of $800 and a credit to cost of goods sold of $400 c. debit to cost of goods sold and credit to inventory of $2,000 d. credit to estimated inventory returns of $400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Botanic Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extend 60 days. On February 10, 2018, a customer purchases $4,000 of products (cost $2,000). Assuming that based on prior experience, estimated returns are 20%. The
a. debit to cash and a credit to sales revenue of $4,000
b. debit to sales revenue and allowances of $800 and a credit to cost of goods sold of $400
c. debit to cost of goods sold and credit to inventory of $2,000
d. credit to estimated inventory returns of $400
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