Sales Returns Recording for Seller

Steps:

• Identify Sue as the seller, so returns affect her sales records.
• Note original sale price of $200 on 10 October; return on 15 October is within discount period but no payment occurred.
• Record return at full invoice price since discount applies only to early payments, not returns.
• Debit sales returns and credit accounts receivable for $200 in sales returns journal.

Why D is correct:

• Sales returns journal debits the return at original sales value ($200), reducing sales revenue and receivable per double-entry accounting principles.

Why the others are wrong:

• A: Purchases returns journal is for buyer's records, not seller's.
• B: Same as A; incorrect journal for seller.
• C: $196 implies 2% discount deduction, but returns are recorded at full price before any settlement.

Final answer: D