Under a perpetual inventory system, the entries to record a $3,400 sales return for undamaged goods on an original cash sale when the merchandise had a cost of $1,500 include a debit to:
A)Accounts Receivable of $3,400.
B)Cost of Goods Sold of $1,500.
C)Sales Returns and Allowances of $1,500.
D)Inventory of $1,500.

Question

Quizplus · Accepted Answer

Under a perpetual inventory system, when a sales return occurs, the inventory account is debited to reflect the return of goods to inventory. The cost of the returned merchandise, $1,500, is added back to inventory.

Under a Perpetual Inventory System, the Entries to Record a $3,400