During the year, sales returns and allowances totaled $55,000. The cost of the merchandise returned was $33,000.
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During the year, sales returns and allowances totaled $55,000. The cost of the merchandise returned was $33,000. The accountant recorded all the returns and allowances by debiting the sales account and crediting Cost of Merchandise Sold for $55,000.
Was the accountant's method of recording returns acceptable? Explain. In your explanation, include the advantages of using a sales returns and allowances account.
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Related Book For
Corporate Financial Accounting
ISBN: 978-1133952411
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
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