Instead of Paying for Merchandise Purchased on Account,Olympic Corp

question 24

True/False

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.

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Definitions:

Adjusting Entry

A journal entry made at the end of the accounting period to allocate income and expenditure to the correct period.

Accounting Period

denotes the specific period of time covered by financial statements, typically a year or a quarter.

Liability Insurance

Insurance that provides protection against claims resulting from injuries and damage to people and/or property.

Prepaid Insurance

An asset account representing insurance payments made in advance for future coverage periods.