Use the information above to answer the following question.What journal entry (entries)will Darin Company make on October 4 to record the sales return?
A) Debit Sales Returns & Allowances and credit Accounts Receivable for $500; debit Inventory and credit Cost of Goods Sold for $200
B) Debit Sales Returns & Allowances for $200 and credit Accounts Receivable for $200
C) Debit Sales for $500 and credit Inventory for $500
D) Debit Accounts Receivable and credit Sales Returns & Allowances for $500; debit Cost of Goods Sold and credit Inventory for $200

Question

Quizplus · Accepted Answer

The correct entry involves reversing the sales and cost of goods sold: debit Sales Returns & Allowances and credit Accounts Receivable for the sales amount, and debit Inventory and credit Cost of Goods Sold for the cost amount.

Use the Information Above to Answer the Following Question