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

question 23

Multiple Choice

Under a periodic inventory system, the entry to record the return of inventory sold on account for $360 with a cost of $210 would be recorded by the seller as a:

• A)credit to Accounts Receivable for $210.
• B)debit to Sales Returns and Allowances for $360.
• C)debit to Sales Revenue for $360.
• D)debit to Inventory for $210.

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Definitions:

SUTA Tax

State Unemployment Tax Act tax, a payroll tax that employers pay to fund the state's unemployment insurance.

Medicare

A federal health insurance program in the United States for people aged 65 and older, as well as for some younger people with disabilities.

Federal Income Tax

A tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.