The Sales Returns and Allowances account is debited when:
A)Merchandise is returned to a supplier.
B)Merchandise is returned by a customer.
C)Payment is made to a supplier within the discount period.
D)An account receivable is collected within the discount period.

Question

Quizplus · Accepted Answer

The Sales Returns and Allowances account is debited when merchandise is returned by a customer. This account is used to track the amount of sales that are returned by customers or the amount of discounts given to customers for damaged or defective merchandise. Option A is incorrect as it would result in a credit to the Purchases Returns and Allowances account. Options C and D are incorrect as they relate to discounts and payments made to suppliers, which would affect different accounts.

The Sales Returns and Allowances Account Is Debited When