Under a Perpetual Inventory System, the Entry to Record the Return

question 109

Multiple Choice

Under a perpetual inventory system, the entry to record the return of inventory sold on account for $250 with a cost of $185 would be recorded by the seller as a:

• A)debit to Accounts Receivable for $250.
• B)debit to Sales Returns and Allowances for $185.
• C)credit to Sales Revenue for $250.
• D)credit to Cost of Goods Sold for $185.

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Definitions:

Internal Rate

Also known as the internal rate of return (IRR), it is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.