A document to support the buyer's return of defective merchandise.Select one:a.Debit Memorandumb.Merchandisingc.Cost of Goods manufacturedd.Income Statement
Question
A document to support the buyer's return of defective merchandise.
Select one:
- a. Debit Memorandum
- b. Merchandising
- c. Cost of Goods manufactured
- d. Income Statement
Solution
The correct choice to support the buyer's return of defective merchandise is:
a. Debit Memorandum
Explanation:
-
A Debit Memorandum is typically issued by a buyer to formally request a reduction in the amount they owe to the seller due to the return of defective goods. It acts as a record of the buyer's claim for a return and the corresponding impact on the accounts payable.
-
The other options do not accurately fit this context:
- b. Merchandising refers to the activities associated with buying and selling goods, which does not specifically address the return of defective merchandise.
- c. Cost of Goods Manufactured pertains to the total cost of production of goods completed during a period, which again does not relate directly to returns.
- d. Income Statement summarizes revenues and expenses over a specific period but does not function as a supporting document for returns.
Therefore, a Debit Memorandum is the appropriate document to support the buyer's return of defective merchandise.
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