Question on: WAEC Accounting - 2015
The total of the returns outwards journal is posted to the
A
Credit side of the returns outwards book
B
Debit side of the returns outwards account
C
Debit side of the purchases returns book
D
Credit side of the returns outwards account
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Correct Option: D
When merchandise (goods) purchased for cash are returned to supplier, we need to record two journal entries. In first entry we debitĀ accounts receivable accountĀ and creditĀ purchases returns and allowances account. This entry is made to recognize the return of merchandise. In second entry we debitĀ cash accountĀ andĀ credit accounts receivable account. This entry is made when a refund isĀ received from supplier for merchandise returned to him.
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