Sales returns and allowances is credited for the selling price, including sales tax, of any merchandise returned by customers?

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Its not homework. I was asking a question because I didn't know it..

The answer is yes, also you will have to increase your merchandise inventory for the cost of the merchandise (purchase price paid by the company) and decrease your cost of goods sold accounts for the same amount if the merchandise can be resold. Otherwise you will have to transfer the amount of what the company paid to purchase the items to whatever account you use for damaged merchandise.