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Botanic Choice sells natural supplements to customers with an unconditional sales return if they are not...

Botanic Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns period extends 60 days. On February 1, 2018, a customer purchases $4,000 of products (cost $2,400) by paying cash. The journal entry to record the actual return of $800 of merchandise on February 3, 2018 includes a
a. debit to Cost of Goods Sold for $480.
b. debit to Estimated Inventory Returns for $480. c. debit to Returned Inventory for $480.
d. credit to Accounts Receivable for $800.
e. credit to Sales Returns and Allowance for $800.
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Answer #1

On February 3, 2018, a customer returned inventory of $800.

Following journal entry will be made on February 3, 2018 to record sales returns by customer:

Date General Journal Debit Credit
February 3 Sales return and allowances $800
Accounts receivable $800

Correct option is d.

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