[Anonymous]

So when a company sells something, for example, if it sells something for $100 and the cost of the item is $60, what is the journal entry of the sale? And if the customer returns the item, what would the journal entry be?

[Anonymous]

“So when a company sells something, for example, if it sells something for $100 and the cost of the item is $60, what is the journal entry of the sale? And if the customer returns the item, what would the journal entry be?”

Dr. Cash (or A/R) 100

Cr. Sales 100

Dr. COGS 60

Cr. Inventory 60

Return:

Dr. Inventory 60

Cr. COGS 60

Dr. Sales Returns and Allowances 100

Cr. Cash (or A/R) 100

[Anonymous]

Thanks man. I can't believe I forgot something so elementary.

[Anonymous]

Hey no worries. We could all use a refresher from time to time…even on the basic stuff. Best of luck to you.

[Author]

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