Homework Sourse15 way to The record thies t ost of SolutionEntry shall be t
15 way to The record thies t ost of
Solution
Entry shall be the following:
Explanation:
On return, previous sales revenue shall reduce, hence, sales revenue account will be debited with $9,500. As cash paid back, cash is credited.
Goods returned increases stock on hand, hence, Inventory account debited with its cost. As inventory is expensed to cost of goods sold on sale, now on return same is reversed, crediting cost of goods sold account.
| Account | Debit | Credit |
| Sales revenue | 9500 | |
| To cash | 9500 | |
| [Entry to record return of cash sales] | ||
| Merchandise inventory | 3800 | |
| To cost of goods sold | 3800 | |
| [Entry to reverse inventory expensed on sale, now returned] |
