Under a periodic inventory system, the entries to record a $2,600 sales return of undamaged goods for a sale originally made on account, when the merchandise had a cost of $1,200, include a:
A)debit to Inventory of $1,200.
B)debit to Sales Returns and Allowances of $2,600.
C)credit to Cost of Goods Sold of $2,600.
D)credit to Sales Returns and Allowances of $1,200.

Question

Quizplus · Accepted Answer

AUnder a periodic inventory system, when goods are returned, the Sales Returns and Allowances account is debited for the sales price of the returned goods ($2,600), reflecting a reduction in revenue. The Inventory account is debited for the cost of the returned goods ($1,200), indicating the restoration of inventory that was previously sold.

Under a Periodic Inventory System, the Entries to Record a $2,600