Asked by Abbie Mulbarger on May 12, 2024
Verified
The entry to record the return of merchandise from a customer would include a
A) debit to Sales
B) credit to Sales
C) debit to Customer Refunds Payable
D) debit to Estimated Returns Inventory
Customer Refunds Payable
A liability account representing amounts owed to customers for returned or unsatisfactory products or services.
Merchandise
Goods or products that are purchased for resale to customers, typically found in a retail or wholesale environment.
Sales
The revenue earned from selling goods or services to customers.
- Understand the accounting treatment for merchandise returns from customers.
Verified Answer
MB
Mehak bhardwajMay 16, 2024
Final Answer :
C
Explanation :
When a customer returns merchandise, the refund is recorded by crediting the sales account and debiting the customer refunds payable account. Therefore, the best choice is C, which shows a debit to customer refunds payable. Neither A or B are correct as they involve the sales account. D is incorrect because it involves estimated returns inventory, which is not used in recording the return from a customer.
Learning Objectives
- Understand the accounting treatment for merchandise returns from customers.
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