On October 1, Robertson Company sold merchandise in the amount of $5,800 to Albe

Question

On October 1, Robertson Company sold merchandise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses the periodic inventory system. On October 4, Alberts returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Robertson must make on October 4 is: A) Sales returns and allowances 500 500 Accounts receivable Merchandise inventory Cost of goods sold 350 350 B) Sales returns and allowances 500 Accounts receivable 500 C) Accounts receivable 500 Sales returns and allo wances 500 D) Accounts receivable 500 Sales returns and allowances 500 Cost of goods sold 350 Merchandise inventory 350 E) Sales returns and allo wances 350 Accounts receivable 350

Explanation / Answer

Sales return and allowances 500         Accounts Receivable 500 Option B is correct

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