A 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 are correct.

Question

Quizplus · Accepted Answer

When merchandise is returned after payment within the cash discount period, the return is recorded by crediting an asset account, typically either Cash or Accounts Receivable, to reflect the reduction in the company's assets due to the refund given to the customer.

A Customer Returned Merchandise Having Already Paid for It Within