When a customer accepts an allowance on unwanted goods, the journal entry for a merchandiser using the perpetual inventory system will include a debit to Sales Returns and Allowances and a debit to Inventory.

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The journal entry for a merchandiser using the perpetual inventory system will include a debit to Sales Returns and Allowances and a credit to Inventory for the amount of the allowance granted. This is because the value of the unwanted goods is being deducted from inventory, and the customer is receiving a credit for the amount of the allowance granted.

When a Customer Accepts an Allowance on Unwanted Goods, the Journal