Question

In: Accounting

When a customer returns goods to the seller, the sellers need to debit Estimated Returns Inventory....

When a customer returns goods to the seller, the sellers need to debit Estimated Returns Inventory. The seller uses the perpetual inventory system. True or False.

Solutions

Expert Solution

The statement is TRUE.

Let understand the transaction...

Seller --- The person who selling the goods

Customer -- The person who buying the goods

When customer returns goods the seller reduce the account of customer by the amount of return goods and debit the Sales Return and ALlowance Account.

It is assuming that Estimated Returns Inventory is the same type of account as Sales Return and Allowance.

Otherwise the statement is FALSE.

ekkarill92 answered 1 year ago
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