Journalizing Sales and Cash Receipts Using Special Journals Chapter 10, Section 3

Sales Returns and Allowances Credit allowed a customer for the sales price of returned merchandise Sales Allowance Credit allowed a customer for part of the sales price of merchandise that is not returned Contra account to Sales Sales Returns and Allowances Debit Normal Balance  

Credit Memorandum Form prepared by the vendor showing the amount deducted for returns and allowances Called a credit memorandum because Accounts Receivable is credited when there is a return or allowance

Recording Sales Returns and Allowances What accounts are affected? How are the accounts affected? Debit or credit? What is the source document? What journal? Sales Returns and Allowances Accounts Receivable/ Customer Name Sales Tax Payable Debit Normal Balance Debit Normal Balance Credit Normal Balance   

Journalizing Sales Returns and Allowances March 11. Granted credit to Village Crafts for merchandise returned, $58.50, plus sales tax, $3.51, from S160; total, $62.01. Credit Memorandum No. 41. 2 4 1 3 5 6 9 8 7 1. Write the date. 6. Write the sales tax amount. 2. Write Sales Returns and Allowances. 7. Write the accounts to be credited. 3. Write CM and the credit memorandum number. 8. Draw a diagonal line in the Post. Ref. column. 4. Write the amount of the sales return. 9. Write the total accounts receivable amount. 5. Write Sales Tax Payable.

Problems Work Together 10-3 (Textbook pg. 287) On Your Own 10-3 (Textbook pg. 287) Application 10-3 (Textbook pg. 290)