Asked by Michelle Chrisette on Jul 28, 2024
Verified
When a buyer returns merchandise purchased for cash, the buyer will record the transaction as a
A) debit to Inventory; a credit to Cash
B) debit to Cash; a credit to Inventory
C) debit to Cash; a credit to Sales
D) debit to Sales; a credit to Accounts Payable
Cash Returns
Financial returns or profits that are received in the form of cash, as opposed to stock dividends or other non-liquid forms of return.
Inventory
Goods and materials held by a company for the ultimate goal of resale or production, including raw materials, work-in-progress, and finished goods.
- Record transactions related to merchandise returns and allowances.
Verified Answer
ZK
Zybrea KnightAug 02, 2024
Final Answer :
B
Explanation :
When a buyer returns merchandise purchased for cash, the buyer receives cash back from the seller. Therefore, the buyer's accounting record should show a decrease in cash and an increase in inventory. This is done through a debit to Cash and a credit to Inventory.
Learning Objectives
- Record transactions related to merchandise returns and allowances.
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