Problem: J Company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. The correct journal entry to record the merchandise return on July 7 is: a. Debit Merchandise Inventory $200; credit Sales Returns $200. b. Debit Accounts Payable $200; credit Merchandise Inventory $200. c. Debit Merchandise Inventory $200; credit Sales $200. d. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600.

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Problem Details

J Company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. The correct journal entry to record the merchandise return on July 7 is:

a. Debit Merchandise Inventory $200; credit Sales Returns $200.

b. Debit Accounts Payable $200; credit Merchandise Inventory $200.

c. Debit Merchandise Inventory $200; credit Sales $200.

d. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600.

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Our tutors have indicated that to solve this problem you will need to apply the Periodic Inventory - Purchasing Summary concept. You can view video lessons to learn Periodic Inventory - Purchasing Summary. Or if you need more Periodic Inventory - Purchasing Summary practice, you can also practice Periodic Inventory - Purchasing Summary practice problems.

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What professor is this problem relevant for?

Based on our data, we think this problem is relevant for Professor Sinmaz's class at HCC.