0
When merchandise that was sold is returned a credit to sales returns and allowances is made True or False?
Beckybrowneyes85
true
Wiki User
∙ 11y ago
Add your answer:
Earn +20 pts
Journal entry in financial accounting for purchase return?
Like sales discounts, sales returns and allowances reduce sales revenue. They also result in additional shipping and other expenses. Since managers often want to know the amount of returns and allowances for a period, the seller records sales returns and allowances in a separate account. Sales Returns and allowances is a "Contra (or offsetting) asset account to Sales. The seller debits Sales Returns and Allowances for the amount of the return or allowance. If the original sale was on account, the seller credits Accounts Receivable. Since merchandise inventory is kept up to date in a perpetual system, the seller adds the cost of the returned merchandise to the merchandise inventory account. The seller must also credit the cost of returned merchandise to the cost of merchandise sold account, since this account was debited when the original sale was made. What if the buyer pays cash and then later returns the merchandise. In this case the seller may issue a credit and apply it against other accounts receivables owed by the buyer, or the cash may be refunded. If the credit is applied against the buyer's other receivables, the seller records entries similar to those preceding. If cash is refunded for merchandise or for allowances, the seller debits sales returns and allowances and credits cash.
How should a return of merchandise purchased on account be recorded?
As a debit to the accounts payable account and a credit to the purchases returns and allowances account
What is the journal entry for sales returns and allowances?
Debit: Sales Returns & Allowances Credit: Accounts Receivable :)
Which of the following accounts has a normal credit balance.. a. Merchandise Inventory b. Delivery Expense c. Sales Returns and Allowances d. Sales?
d. sales
Sales Returns and Allowances normal balance?
credit
Journal entry in financial accounting for purchase return?
Like sales discounts, sales returns and allowances reduce sales revenue. They also result in additional shipping and other expenses. Since managers often want to know the amount of returns and allowances for a period, the seller records sales returns and allowances in a separate account. Sales Returns and allowances is a "Contra (or offsetting) asset account to Sales. The seller debits Sales Returns and Allowances for the amount of the return or allowance. If the original sale was on account, the seller credits Accounts Receivable. Since merchandise inventory is kept up to date in a perpetual system, the seller adds the cost of the returned merchandise to the merchandise inventory account. The seller must also credit the cost of returned merchandise to the cost of merchandise sold account, since this account was debited when the original sale was made. What if the buyer pays cash and then later returns the merchandise. In this case the seller may issue a credit and apply it against other accounts receivables owed by the buyer, or the cash may be refunded. If the credit is applied against the buyer's other receivables, the seller records entries similar to those preceding. If cash is refunded for merchandise or for allowances, the seller debits sales returns and allowances and credits cash.
How should a return of merchandise purchased on account be recorded?
As a debit to the accounts payable account and a credit to the purchases returns and allowances account
What is sales returns and allowances classified as?
An income account. Debit Returns & Allowances, Credit Cash.
What is the journal entry for sales returns and allowances?
Debit: Sales Returns & Allowances Credit: Accounts Receivable :)
Which of the following accounts has a normal credit balance.. a. Merchandise Inventory b. Delivery Expense c. Sales Returns and Allowances d. Sales?
d. sales
Sales Returns and Allowances normal balance?
credit
What account is debited when a company returns merchandise to a vendor on credit?
credit
When merchandise is returned under the perpetual inventory system the buyer would credit a. Accounts Payable b. Merchandise Inventory c. Purchases Returns and Allowances...?
The Buyer would likely perform the following transaction: DR- Account Receivable CR - Merchandise Inventory The Buyer would probably debit CASH if they receive CASH from the Seller instead of having to WAIT on it. The Merchandise Seller would perform the following transaction: DR - Merchandise Inventory CR - Accounts Payable, OR CASH
A sales return for credit on account would be recorded in what type of journal?
General Journal Sales Returns and Allowances - A company with sales returns and allowances can record them in the General Journal.
Does sales returns and allowances have a normal debit balance?
That is correct. Sales and returns allowances is what is called a "Contra" account because it exists to reduce the net balance of an account. Sales is a credit account, so you debit sales returns and allowances in order to reduce your net sales.
Does sales returns and allowances have normal credit balance?
No sales returns and allowances has debit balance as a normal balance because these accounts are contra to actual sales account and that's why account balance is reverse of actual sales account.
What is the Journal entry for a customer returning merchandise delivered in poor condition?
[Debit] Sales returns [Credit] Accounts receivable
