Question

Complete the transactional analysis box for the following transaction assuming a perpetual inventory​ system: Issued credit memorandum to

DogDog.com

for defective​ merchandise,

$ 198.

The cost of the merchandise was

$ 111.

It was a credit sale.

		Increase/
Account Affected	Category	Decrease	Rules		T Account Update

Answer 1

Account Titles and Explanation	Debit ($)	Credit ($)
Sales return and allowance A/c	198
To Accounts receivables		198
[Entry to record the sales return of defective​ merchandise Inventory]
Merchandise Inventory A/c	111
To Cost of goods sold A/c		111
[Entry to record the reversal of the cost of the merchandise sold]