Question

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Sue’s Jewelry sold 30 necklaces for $25 each to a credit customer. The invoice included a 6% sales tax and payment terms of 2/10, n/30. Five necklaces were returned prior to payment. The entry to record the return would include a

Answer 1

A. debit to Sales Returns and Allowances for $132.50.

B. debit to Sales Returns and Allowances for $125.00.

C. credit to Sales Tax Payable for $7.50.

D. debit to Accounts Receivable for $132.50.

Answer 2

I believe B