need help with accounting

Accounting
Tutor: None Selected Time limit: 1 Day

Heidi’s Accessories bought 50 necklaces for $10 each on account. 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 debit to
 A. Accounts Payable for $50.00.
B. Accounts Payable for $53.00.
 C. Purchases Returns and Allowances for $50.00.

Apr 26th, 2015

Since this is not a sale made by you with merchandise being returned to you, it is not C. Since the items were returned prior to payment taking the discount, they are not returned at a discounted price. 

B. Accounts payable will be debited by $53. This is because the sales tax is collected by the seller, and is part of the total invoice price. The equation to find the 53 is 5*10*1.06.

Apr 26th, 2015

Thank you so much!

Apr 26th, 2015

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Apr 26th, 2015
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Apr 26th, 2015
Dec 8th, 2016
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