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When a buyer returns merchandise purchased for cash, the buyer will record the transaction as a:____
a. debit to Merchandise Inventory and a credit to Cash
b. debit to Cash and a credit to Sales
c. debit to Cash and a credit to Merchandise Inventory
d. debit to Sales and a credit to Accounts Payable

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hamzatauseef

Answer:

c. Debit to Cash and a credit to Merchandise Inventory

Explanation:

When a buyer returns goods these are return outwards,

The correct entries to record them would be to debit cash as goods have been returned and credit the merchandise purchased so,

Debit cash account with the amount of goods returned

Credit Merchandise inventory with the amount of goods returned.

Hope that helps.

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