When the seller accepts a return of undamaged goods from the purchaser, the seller's journal entries would include two entries, if they are using a perpetual inventory system.

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In a perpetual inventory system, when a seller accepts a return of undamaged goods, the journal entries would include reversing the revenue (by crediting sales returns and allowances and debiting accounts receivable or cash) and adjusting the inventory (by debiting inventory and crediting cost of goods sold) to reflect the return of goods to inventory.

When the Seller Accepts a Return of Undamaged Goods from the Purchaser