Asked by Lauren Knight on Apr 28, 2024
Verified
A wholesale customer returned merchandise having already paid for it within the cash discount period. The return will be recorded with:
A) a credit to an asset account.
B) a credit to a liability account.
C) a credit to Capital.
D) None of these is correct.
Cash Discount Period
A specific time frame during which a buyer can pay less than the full amount due by taking advantage of a discount offered.
Liability Account
A financial accounting term for amounts owed by a business to creditors or others, usually categorized as current or long-term.
Asset Account
An account that records the value of resources owned by an entity which have economic value and can provide future benefits.
- Utilize accounting rules for handling transactions that include sales discounts, returns, and allowances.
- Analyze the repercussions of merchandise returns on accounting records.
Verified Answer
Learning Objectives
- Utilize accounting rules for handling transactions that include sales discounts, returns, and allowances.
- Analyze the repercussions of merchandise returns on accounting records.
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