Question

Tom's Textiles shipped the wrong material to a customer, who refused to accept the order. Upon receipt of the material, Tom's would credit accounts receivable and debit A) Sales. B) Sales discount. C) Sales returns.

Answer 1

Answer:

C) Sales returns.

Explanation:

A sales return is an actual return of merchandise inventory by a customer for any reason. The sales return account is a contra sales account, due to its debit nature it is adjusted into the sales value to calculate net sales. As the sales were recorded by the Tom's Textiles so, the return will be classified as sales return.