For a firm that uses the perpetual inventory system, the Sales Returns and Allowances account:
A) Is not a contra account
B) Has a normal credit balance
C) Is not used
D) Is debited by the firm receiving returned goods from a customer

Question

Quizplus · Accepted Answer

When a firm receives returned goods from a customer, the following entry is made:
Sales returns and allowances XXX
$\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ Accounts receivable XXX
Inventory XXX
$\quad $ $\quad $ $\quad $ $\quad $ Cost of goods sold XXX
To record the return of sales merchandise

For a Firm That Uses the Perpetual Inventory System, the Sales