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The MCQs below are drawn from the Accountancy & Auditing subject category.
Showing 3811–3820
of 4621 MCQs
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3811
When a customer returns goods, which account should be debited?
When goods previously sold are returned by a customer, the transaction is recorded in the 'Returns Inward' or 'Sales Return' account. Since sales are a credit entry, the return of those goods acts as a debit to the Returns Inward account to reduce the total sales figure for the period.
3812
When a customer returns goods purchased on credit, which document should the seller issue to the customer?
A credit note is a document issued by a seller to a buyer to notify them that their account has been credited for the value of goods returned or for an overcharge. This effectively reduces the amount the buyer owes to the seller, serving as the formal accounting record for the return of goods.
3813
In which journal is a credit note or credit memo typically recorded?
A credit note is issued to a customer when goods are returned. Consequently, these transactions are recorded in the Sales Return Day Book (or Sales Return Journal) to reduce the customer's balance and adjust the sales records accordingly.
3814
When a customer returns merchandise previously sold to them, which account should be debited?
Sales returns and allowances is a contra-revenue account used to record the return of goods by customers. Since sales revenue is normally a credit balance, a debit to the sales returns account reduces the total net sales for the period.
3815
Which specialized journal utilizes a credit note as the primary source document for recording transactions?
A credit note is issued by a seller to a buyer when goods are returned or an overcharge is corrected. When a business receives returned goods from a customer, it issues a credit note to reduce the customer's account balance. Consequently, these transactions are recorded in the Sales Return Journal (also known as the Returns Inward Book).
3816
How is the total amount from the sales return book treated in the ledger?
The Sales Return Book records goods returned by customers. Since sales are a revenue (credit), sales returns are a contra-revenue item. Therefore, the total of the sales return book is debited to the Sales Return Account to reduce the total sales figure for the period.
3817
What is the formal accounting term for goods returned by a customer to the seller?
When a customer returns goods previously purchased, the seller records this as a 'Sales Return'. This transaction reduces the total sales revenue for the period. While 'Return Inwards' is also a technically correct term used in some accounting systems, 'Sales Return' is the standard terminology used in modern financial reporting to describe the reversal of a sale.
3818
In which journal is a credit note issued to a customer recorded?
A credit note is issued by a seller to a buyer when goods are returned. This transaction is recorded in the sales return day book (or sales returns journal) to reduce the total sales figure and adjust the customer's account balance accordingly, reflecting the reversal of the original sale.
3819
To which account should goods returned by a customer be debited?
When a customer returns goods previously sold to them, the transaction is recorded in the Sales Return Book or Return Inward Book. The Return Inward account is debited to reflect the reduction in sales revenue, while the customer's account is credited to reduce the amount they owe.
3820
When a seller (X) invoices goods to a buyer (Y) and the goods are found to be damaged, which document should X issue to Y?
A credit note is a document issued by a seller to a buyer to reduce the amount the buyer owes. It is typically used when goods are returned due to damage or when an overcharge has occurred, effectively reversing the original sales invoice amount.
