ACCT Sales Return

What is recorded when merchandise is sold on account for 1,000,000

Accounts Receivable 1,000,000 Sales Revenue 1,000,000

Sales Return is reported on the _________ as a _________

Balance sheet; contra revenue

What is recorded when merchandise costs 600,000

COGS 600,000 Inventory 600,000

What is recorded when the company receives 800,000 form customer on account

Cash 800,000 Accts Rec. 800,000

Allowance for Sales Return is reported on the __________ as a ____________

Income statement; contra asset

When customers return 80,000 and the cost of merchandise was 60% of the selling price and accounts are credited what is recorded?

Sales Return 80,000 Acct Rec 80,000 Inventory 48,000 (80,000*.8) COGS 48,000

What is the Sales Return Adj. Entry

Sales Return XXX Allowance for Sales Return XXX Inventory - est. return XXX COGS XXX

What is Sales Return?

When a customer returns a defective product

Sales Return is a

contra revenue