6 Questions
What is the purpose of the first adjusting entry?
To recognize the estimated refunds that may occur in 2021
What is the effect of the second adjusting entry on the Cost of Merchandise Sold?
It decreases the Cost of Merchandise Sold
What is the initial balance of Customer Refunds Payable before the adjusting entries?
$800
What is the name of the account that is debited instead of Merchandise Inventory for the estimated returns?
Estimated Returns Inventory
Where is Estimated Returns Inventory reported on the balance sheet?
Right after Merchandise Inventory
What is the total amount of estimated refunds that may occur in 2021?
$7,154
Quiz about accounting entries for estimated refunds and returns. Learn how to debit and credit accounts for refunds and returns in 2021.
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