If a customer agrees to keep merchandise that is defective because the seller is willing to reduce the selling price, this transaction is known as a sales
A) discount.
B) return.
C) contra asset.
D) allowance.

Question

Quizplus · Accepted Answer

This transaction is known as a sales allowance. A sales allowance occurs when a seller reduces the selling price of defective or damaged merchandise that the buyer agrees to keep, rather than returning it.

If a Customer Agrees to Keep Merchandise That Is Defective