PRC-1 · Chapter 2 · Question 36 of 100
A customer returns defective goods that were originally purchased for physical cash from 'Neon Electronics'. The business refunds the customer immediately. In which book of prime entry is this refund recorded?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Cash book
Explanation
Because physical cash is refunded to the customer immediately, there is an outflow of money. All cash and bank payments, including cash refunds, are recorded on the payment side of the Cash Book.
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