A merchandiser sold merchandise inventory on account.The journal entry to record a sales allowance in the books of the merchandiser,using the perpetual inventory system would be:

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The journal entry to record a sales allowance in the books of a merchandiser using the perpetual inventory system would be to debit the sales allowance account and credit the accounts receivable account. Option B shows the correct account titles and would result in a decrease in both assets and equity. Option A shows a debit to the sales returns and allowances account, which is incorrect, as this account is typically used when merchandise is returned for a refund. Option C shows a credit to the inventory account, which is not correct, as the merchandise has already been sold. Option D shows a debit to the accounts payable account, which is not correct, as the merchandise was sold on account, not purchased on account.

A Merchandiser Sold Merchandise Inventory on Account