A sales return is recorded with a credit to Inventory.

Name: A sales return is recorded with a credit to Inventory.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A sales return is recorded with a debit to Sales Returns and Allowances (or a similar account) and a credit to Accounts Receivable or Cash, depending on the original sale. Inventory is adjusted separately, typically with a debit to Inventory and a credit to Cost of Goods Sold if the returned goods are restocked.

A Sales Return Is Recorded with a Credit to Inventory