Randy,a customer of Classics Company,returned $45 of goods that were purchased on account.Under the perpetual inventory system,Classics will record a:

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When a customer returns goods under the perpetual inventory system, the company records a debit to Sales Returns and Allowances (contra-revenue account) and a credit to Accounts Receivable - Randy, which reduces the amount of revenue earned and the amount owed by the customer. The amount of the debit and credit is equal to the selling price of the goods returned, which in this case is $45. Option B is incorrect because it implies that the company is recognizing the revenue twice for the goods sold and returned. Option C is incorrect because it suggests that the return affects the cost of goods sold, which is not the case. Option D is incorrect because it records the return as a reduction in revenue and an increase in the cost of goods sold, which is incorrect.

Randy,a Customer of Classics Company,returned $45 of Goods That Were