When the Seller Accepts a Return of Goods from the Purchaser

question 82

Multiple Choice

When the seller accepts a return of goods from the purchaser originally sold on account, the seller's journal entry would include a debit to:

• A)Sales Discounts and credit to Cash.
• B)Sales Returns and Allowances and credit to Accounts Receivable.
• C)Sales Returns and Allowances and credit to Sales Discounts.
• D)Sales Revenue and credit to Cash.

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Definitions:

Lemon Laws

Laws designed to offer remedies to consumers for products such as automobiles that repeatedly fail to meet standards of quality and performance.

Dealer Warranties

Guarantees issued by sellers that vow to repair or replace products if they fail to meet specified criteria within a certain time frame.

Adverse Selection

A situation in which one party in a transaction has more or better information than the other party, typically resulting in an unfavorable selection process.

Peaches

A type of fruit with a distinctive sweet taste, fuzzy skin, and a pit or stone in the center.