A sales return from a customer is recorded by debiting Sales Returns Account and crediting which account?
Correct answer: A. Customer's Account
- A. Customer's Account
- B. Purchases Account
- C. Cash Account
- D. Sales Account
Explanation
A return from a customer reduces the amount receivable from that customer, so the customer's account is credited. Sales Returns Account is debited because it records the reduction in sales revenue.
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About Ledger Accounts and the Trial Balance
Ledger accounts collect transactions under individual headings and use debit and credit sides to determine balances. The trial balance lists those balances to check arithmetical agreement before financial statements are prepared, but it does not reveal every error, such as complete omission, compensating errors or entries made in the wrong account.
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