On September 5, Anders Company sold merchandise in the amount of $4,750 to Hoove

Question

On September 5, Anders Company sold merchandise in the amount of $4,750 to Hoover Co with credit terms 1/10, n/30. The cost of the items sold $2,275. On September 6 Hoover returned merchandise worth $750. The cost of the returned items is $500. The journal entry to record the return includes:

A. Debit to Sales Returns and Allowances $750, credit Accounts Receivable $750.

B. Debit Accounts Receivable $500, debit Sales discount $250, credit Sales Returns and Allowances $750.

C. Debit Accounts Payable $750, credit Sales Returns and Allowances $750.

D. Debit Sales Returns and Allowances $750, credit Cost of Goods Sold $750.

A company uses the perpetual inventory system and recorded the following entry: Accounts Payable 2,500 Merchandise Inventory 50 Cash 2,450 This entry reflects a: O Purchase of merchandise on credit. Return of merchandise. O Sale of merchandise on credit O Payment of the account payable less a 2% cash discount taken. O Payment of the account payable less a 1% cash discount taken.

Explanation / Answer

C. Debit Accounts Payable $750, credit Sales Returns and Allowances $750.

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