If a company only has a small number of sales returns transactions for any given year, they
may enter such transactions in the General Journal. However, when the number of sales
returns is large, a special journal for Sales Returns and Allowances would probably be
utilized. If such a journal is established, which of the following statements is true?
Credits to this journal will be to the Cash account.
Credits to this journal will be to the Inventory account.
Credits to this journal will be to Accounts Receivable account.
Credits to this journal will be to the Sales Revenue account.
None of the above is true.
Feedback: When a Sales Returns Journal is set up, its typical configuration is to have a column for debits
(rather than credits) to Inventory. P2
One of our customers always buys items from us on credit terms of 2/10, net 60. In order to
find out if this customer has paid us any particular invoice, which of the following records
would have to be examined?
One of the special journals used by the Baxter Corporation is the Sales Journal: its setup
follows the format illustrated in the textbook. When posting items from the Sales Journal to
the General Ledger, which of the following statements will be true?