Question

Nash's Trading Post, LLC recorded the return of $150 of goods originally sold on credit to Discount Industries. Using the periodic inventory approach, Nash's would record this transaction as:

Accounts Payable 150
Sales Returns and Allowances 150
Sales Returns and Allowances 150
Accounts Receivable 150
Accounts Receivable 150
Sales Returns and Allowances 150
Inventory 150
Accounts Receivable 150

Answer 1

Sales Returns and Allowances 150

Accounts Receivable 150

Step-by-step 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, the Accounts Receivable which is an asset decreases, so it is credited.

Account Titles and Explanations Debit Credit

Sales Returns and Allowances $150

Accounts Receivable $150

(To record sales returns)