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which of the following is the correct journal entry to record a credit note issued to a customer for goods returned?
A dr sales return
cr cash
B dr sales return
cr receivables
confused because I think it could be either depending on if its a cash sale or a credit sale. thanks in advance…..
It is always B.
Issuing a credit note does not automatically mean that you give them cash back – they might buy more goods and use the credit note to pay less.
If you do give the cash back after issuing the credit note, then it is a separate entry – Dr Receivables Cr Cash
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