Instead of paying for merchandise purchased on account,Olympic Corp.returned this merchandise to the supplier.Olympic should record this transaction by debiting Accounts Payable and crediting Sales Returns and Allowances.

Question

Quizplus · Accepted Answer

Olympic should record this transaction by debiting Accounts Payable and crediting Inventory (or Purchases Returns and Allowances if using a periodic inventory system), not Sales Returns and Allowances, as the transaction affects purchases, not sales.

Instead of Paying for Merchandise Purchased on Account,Olympic Corp