ACC 225 WEEK 5 DQ 2 - There would not be a debit to sales...

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Week 5 Discussion Question 2 · Due Date: Day 4 [Main] forum · Post your response to the following: Read the BTN5-3 Ethics Challenge on p. 218 of the text. Discuss the ethics of what Amy is doing. Are there any consequences to her actions? How does the store account for Amy’s returns?
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Assuming the co. didn't realise that the suit had been worn, and gives her the fullrefund, it would pass the following  entry: Dr Merchandise inventory (cost price) Cr COGS (cost price) Dr Sales (Selling price) Cr Cash/charge card refund (selling price)
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Unformatted text preview: There would not be a debit to sales. The debit would be to sales returns and allowances, a contra revenue account to sales. A debit to sales, for sales returns and allowances and sales discounts, would not be incorrect as far as the nature of debits and credits go, but, the sales account should be left alone. If there were frequent debits and credits posted to the account, a total sales figure would not be available. With the use of the contra accounts, the total sales is at all times accessible....
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This note was uploaded on 10/17/2011 for the course ACC 225 acc 225 taught by Professor Unknown during the Spring '10 term at University of Phoenix.

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ACC 225 WEEK 5 DQ 2 - There would not be a debit to sales...

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