Washington Business Daily

What accounts are affected by this transaction in a ledger?

This is the transaction: A customer returns $50.00 worth of inventory that had been sold to her for $80.00, what accounts are affected? Can someone tell me by how much money is each account affected and which side it is (debit or credit)

Public Comments

1. The easiest way to think through a j/e is to think about where the funds are coming from (credit,) and where the funds are going to (debit.) In this case it's a bit unclear to me whether the customer is returning $50 worth @ the seller's cost or the customer's cost. Also missing is the information as to whether it's a cash transaction or on account. Assuming that it's @ seller's cost and that it's a retail sale for cash the entries would be: Returns and Allowances (dr) $60 Cash (cr) $60 Inventory (dr) $50 Cost of Goods Sold (cr) $50 To record the return of non-defective mdse and cash refund.