1. Company 1 sold goods to a customer on credit for £300,000. The goods were purchased in cash for £200,000. The customer subsequently returned goods
with a sale value of £50,000 to the Company. Which of the following entries is
consistent with the net effect of the above transactions?
A. Debit goods for resale £300,000 and credit revenue £300,000
B. Debit purchases £150,000 and credit cash £150,000
C. Debit receivables £250,000, debit purchases £200,000, debit returns inward
£50,000, credit revenue £300,000 and credit cash £200,000
D. Debit receivables £300,000, debit purchases 150,000, credit revenue
£250,000 and credit cash £200,000