On August 5, Oriole Ltd. sells goods for $1530 and the cost to Oriole was $700. Oriole expects a return rate of 5%. On August 12, goods with a selling price of $440 and a cost of $245 are returned for credit and restored to inventory. The journal entry to record the return will include a a>credit to Estimated Inventory Returns for $245. b>credit to Inventory for $245. c>debit to Accounts Receivable for $440. d>credit to Refund Liability for $440.
On August 5, Oriole Ltd. sells goods for $1530 and the cost to Oriole was $700. Oriole expects a return rate of 5%. On August 12, goods with a selling price of $440 and a cost of $245 are returned for credit and restored to inventory. The journal entry to record the return will include a a>credit to Estimated Inventory Returns for $245. b>credit to Inventory for $245. c>debit to Accounts Receivable for $440. d>credit to Refund Liability for $440.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On August 5, Oriole Ltd. sells goods for $1530 and the cost to Oriole was $700. Oriole expects a return rate of 5%. On August 12, goods with a selling price of $440 and a cost of $245 are returned for credit and restored to inventory. The
a>credit to Estimated Inventory Returns for $245.
b>credit to Inventory for $245.
c>debit to Accounts Receivable for $440.
d>credit to Refund Liability for $440.
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