Asked by Victoria Konko on May 05, 2024

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In a perpetual inventory system, Sales Returns and Allowances is credited when a sales return occurs.

Sales Returns

Refers to the process of customers returning previously purchased merchandise back to the seller, and the seller, in turn, refunds the customer's money or offers credit.

Perpetual Inventory System

An inventory accounting system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

  • Conduct the procedure of transaction recording following the principles of both perpetual and periodic inventory systems.
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JC
Jordan CampbellMay 09, 2024
Final Answer :
False
Explanation :
In a perpetual inventory system, when a sales return occurs, the Sales Returns and Allowances account is debited to decrease revenue, not credited.