Assuming a perpetual inventory system, on November 16, merchandise has been returned to Dollar Store (that was bought on November 13). The returned items are priced at $160 and cost $80; noting that theywere not damaged and hence returned to inventory. The entries to book this transaction is as follows:OA.Dr. Sales Return and Allowances 160; Accounts Receivable 160Dr. Merchandise Inventory 80; Cr. Cost of Goods Sold 80OB.Dr. Sales Return and Allowances 80; Accounts Receivable 80Dr. Merchandise Inventory 80; Cr. Cost of Goods Sold 80Oc.Dr. Sales Return and Allowances 160; Accounts Receivable 160Dr. Cost of Goods Sold 80; Cr. Merchandise Inventory 80OD.Dr. Accounts Receivable 160; Sales Return and Allowances 160Dr. Merchandise Inventory 160; Cr. Cost of Goods Sold 160

Journal: Journal is considered as a book of original entry because all the transactions that have…

Answered: Store was bou were not damaged and…

Store was bou were not damaged and hence returned to inventory. The entries to book this transaction is as follows: OA Dr. Sales Return and Allowances 160; Accounts Receivable 160

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Assuming a perpetual inventory system, on November 16, merchandise has been returned to Dollar Store (that was bought on November 13). The returned items are priced at $160 and cost $80; noting that they
were not damaged and hence returned to inventory. The entries to book this transaction is as follows:
OA.
Dr. Sales Return and Allowances 160; Accounts Receivable 160
Dr. Merchandise Inventory 80; Cr. Cost of Goods Sold 80
OB.
Dr. Sales Return and Allowances 80; Accounts Receivable 80
Dr. Merchandise Inventory 80; Cr. Cost of Goods Sold 80
Oc.
Dr. Sales Return and Allowances 160; Accounts Receivable 160
Dr. Cost of Goods Sold 80; Cr. Merchandise Inventory 80
OD.
Dr. Accounts Receivable 160; Sales Return and Allowances 160
Dr. Merchandise Inventory 160; Cr. Cost of Goods Sold 160

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