I need some help with this question, I thought I had it, but I don\'t. Sallie\'s
ID: 2481194 • Letter: I
Question
I need some help with this question, I thought I had it, but I don't.
Sallie's Accessories bought 50 necklaces for $10 each on account. The invoice included a 2% sales tax and payment terms of 2/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the return wouldinclude:
A.a debit to Purchases Returns and Allowances for $50.00.
B.a debit to Accounts Payable for $50.00.
C.a debit to Accounts Payable for $51.00.
D. a debit to Purchases Returns and Allowances for $51.00.
So I don't think it is A or D because the return happened before a payment was made, I'm just now confused it it is $50.00 or $51.00
Explanation / Answer
Solution :
Purchase
500
sales tax
10
accounts payable
510
(entry for purchase)
accounts payable
51
Purchase
50
sales tax
1
(entry for return of purchase)
Purchase
500
sales tax
10
accounts payable
510
(entry for purchase)
accounts payable
51
Purchase
50
sales tax
1
(entry for return of purchase)