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Analyzing a Source Document Answer these questions, based on the debit memorandum shown
Chapter 18, Problem 18-4(choose chapter or problem)
Analyzing a Source Document
Answer these questions, based on the debit memorandum shown here.
1. Which company is returning the merchandise?
2. How many items are being returned?
3. What amount is entered in the journal entry?
4. Which account is debited?
5. Which account is credited?
Questions & Answers
QUESTION:
Analyzing a Source Document
Answer these questions, based on the debit memorandum shown here.
1. Which company is returning the merchandise?
2. How many items are being returned?
3. What amount is entered in the journal entry?
4. Which account is debited?
5. Which account is credited?
ANSWER:
Step 1 of 5
Purchase return and allowance reflect the deductions in the purchase account caused by the return of merchandise inventory. It is used to adjust the inventory balance in the periodic inventory method.