When a refund for an item is done in a different month from which it was purchased, do you debit sales, credit inventory or credit cost of goods and debit sales?
submitted by Paulette

Arnold

That depends on whether you track refunds. It is not a two-part entry.
Debit Inventory
Credit Cash (for the refund)
Debit Refunds
Credit Cost of Goods Sold

Your balance sheet will show Sales net of Refunds.