Nice Guys Apparel received a $200 credit memorandum as an allowance for goods that it returned to one of its suppliers. Identify the statement below that would be correct when posting the transaction.
A)A credit of $200 would be posted to the Purchases account in the general ledger.
B)A debit of $200 would be posted to the supplier's account in the accounts payable ledger.
C)A debit of $200 would be posted to the supplier's account in the accounts receivable ledger.
D)A credit of $200 would be posted to the Accounts Receivable account in the general ledger.

Question

Quizplus · Accepted Answer

When Nice Guys Apparel returns goods to a supplier, they receive a credit memorandum, which is essentially an allowance for the returned goods. To record this transaction, a debit of $200 would be posted to the Accounts Payable account in the general ledger, reducing the amount owed to the supplier.

Nice Guys Apparel Received a $200 Credit Memorandum as an Allowance