Question

Skysong, Inc. returned $140 of goods originally purchased on credit from Concord Industries. Using the periodic Inventory approach, Skysong would record this transaction as:_____.
Accounts Payable 190
Sales Returns and Allowances 190
Sales Returns and Allowances 190
Accounts Receivable 190
Inventory 190
Accounts Receivable 190
Accounts Receivable 190
Sales Returns and Allowances 190

Answer 1

Answer:

Sales Returns and Allowances $140 and Accounts Receivable $140

Explanation:

When goods are returned, the sales revenue decreases through Sales Returns and Allowances which is an expense so it is debited and the goods sold on account so the Accounts Receivable which is an asset decreases so it is credited.

Date   Account Titles and Explanations    Debit   Credit

          Sales Returns and Allowances          $140

                 Accounts Receivable                                $140

           (To record sales returns)