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Unformatted text preview: allowances account is subtracted from purchases. If Music World discovers $100 worth of defective merchandise in the shipment from Music Suppliers, Inc., Music World prepares a debit memorandum, returns the merchandise, and makes a journal entry that decreases (debits) accounts payable for $100 and that increases (credits) purchases returns and allowances for $100. For reference purposes, the journal entry's description may include the debit memorandum number and the seller's invoice number....
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- Fall '10