jodycjohnson
Apr 21, 2012, 10:05 AM
How do you journalize the receipt of a check for merchandise returned that was originally purchased with cash?
robhvv123
May 8, 2015, 04:29 PM
Somebody returned merchandise that was purchased with cash? And you gave them a Check?
It's a sales return, both the periodic and perpetual inventory systems have a Sales returns and allowances account so you'd debit it and when you sold it to them you credited your GST payable account, so you have to debit GST payable for the tax amount included in the part of the merchandise they're returning, and credit your cash at bank account. All returns go in the general journal, it's one of the only times you'll use the general journal.